Adam Feuersteinhttp://www.thestreet.com/
Columnist Adam Feuerstein covers biotech stocks-in plain English. Also included is his popular weekend biotech-stocks mailbag.en-us1996-2015 TheStreet.com, Inc.Adam Feuersteinhttp://images.thestreet.com/tsc/rss/images/144x200_adam-feuerstein.jpghttp://www.thestreet.com/
Thu, 30 Jul 2015 11:03 EDTThu, 30 Jul 2015 11:03 EDT60Thu, 30 Jul 2015 15:03 GMThttp://www.thestreet.com/story/13237613/1/mannkind-afrezza-sales-underwhelming-again-sanofi-reports.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13237613/1/mannkind-afrezza-sales-underwhelming-again-sanofi-reports.html?cm_ven=RSSFeed
MannKind Afrezza Sales Underwhelming Again, Sanofi Reports<p>Updated from 7:41 a.m. with Thursday stock prices.
PARIS (TheStreet) -- Sales of MannKind's
inhaled insulin Afrezza totaled €2 million in the second quarter, as reported Thursday by marketing partner Sanofi
.
Whether you prefer sales reported in euros or converted into dollars ($2.2 million), Afrezza's performance in the first full quarter of its commercial launch was poor. The only saving grace is that no one, not even the most Kool Aid-drinking MannKind supporter, is surprised.
Afrezza sales totaled €3 million for first six months of the year, according to Sanofi.
MannKind reports second-quarter financial results the week of Aug. 10, which is when we'll learn how much money MannKind and Sanofi are losing in their Afrezza joint venture. On Wednesday, MannKind announced two new financing deals&nbsp;to repay $100 million in debt coming due on Aug. 15.
Unlike Afrezza, Sanofi's other major diabetes drug launch this year is performing reasonably well. Toujeo, a basal (long-acting) insulin, delivered sales of €13 million and €20 million in the second quarter and first half of 2015, respectively.
Overall, Sanofi's diabetes sales fell 3.8% in the second quarter due to lower sales of Lantus in the U.S. Those results were in line with the company's previous forecast.
MannKind shares closed Tuesday at $4.44. The stock was down 4.5% in Thursday trading to $4.24. Sanofi's ADRs are up 0.4%.
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareMNKDWed, 29 Jul 2015 14:33 GMThttp://www.thestreet.com/story/13236205/1/mannkind-relies-on-death-spiral-financing-to-help-settle-looming-debt.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13236205/1/mannkind-relies-on-death-spiral-financing-to-help-settle-looming-debt.html?cm_ven=RSSFeed
MannKind Relies on 'Death Spiral' Financing to Help Settle Looming Debt<p>VALENCIA, Calif. (TheStreet) -- MannKind
is using a mix of discounted stock and more debt to settle a $100 million convertible loan coming due in two weeks.
The stock-for-debt exchange, which covers a bit more than half of MannKind's obligation, is the worst part of the agreement announced Wednesday because the exchange price of the stock is determined by the price of Mannkind shares over the next 10 trading days.
This is the classic definition of a death-spiral convert, a form of distressed financing which forces companies to hand over more shares when the stock price falls. MannKind was able to negotiate a floor price for its stock conversion, which does mitigate some of the potential damage.
MannKind isn't at risk of shutting down imminently because of the death-spiral convert, but the company was forced into a weakened negotiating position with its debt holders because Afrezza, an inhaled form of insulin for diabetes, is selling poorly&nbsp;and its long-term financial health is uncertain at best.
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Money is very easy to come by in the&nbsp;red-hot health care sector today, so MannKind's inability to settle its $100 million debt on more favorable terms is a sign that investors have low confidence in Afrezza and the company's management.
If Afrezza continues to be a commercial disappointment, MannKind will face a cash shortfall&nbsp;in the next year because of other significant spending obligations.
Sanofi
, which sells Afrezza under a license from MannKind, reports second-quarter earnings on Thursday.
MannKind shares are down 7.6% to $4.45 in Wednesday trading following the announcement of the new financing agreement.
Under the agreement, MannKind is issuing new convertible debt due in 2018 to settle $28 million of the existing $100 million convertible debt. Terms of the new debt are similar to the old debt.
For $57 million of the existing debt, MannKind has agreed to issue company stock. The amount of MannKind stock to be issued will be determined by price of the stock over the next 10 trading days, through Aug. 11.
MannKind did not disclose how it plans to settle the remaining $15 million owed to holders of the $100 million convertible debt, but it's likely the company will use existing cash.
&quot;This seems like the best MannKind could do,&quot; says a health care portfolio manager who specializes in convertible debt financings but does not own any of the MannKind debt. His firm's compliance rules don't allow him to be quoted by name.
&quot;MannKind doesn't have the cash [to settle] so this is the best deal for them -- roll some bonds and pay back with worthless equity.&quot;
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechBondsConvertible SecuritiesDrugsHealth CareMNKDTue, 28 Jul 2015 20:15 GMThttp://www.thestreet.com/story/13234806/1/gilead-q2-earnings-kapow-bam-boom-yes-that-good.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13234806/1/gilead-q2-earnings-kapow-bam-boom-yes-that-good.html?cm_ven=RSSFeed
Gilead Q2 Earnings: KAPOW! BAM! BOOM! (Yes, That Good)<p>FOSTER CITY, Calif. (TheStreet) --
Gilead Sciences
will not be blamed for&nbsp;a cooling of the biotech bull market, if any such thing exists. Second-quarter earnings and revenue topped Street expectations, bolstered by really strong hepatitis C drug sales. Gilead raised product sales guidance for the remainder of the year.
Biogen's
second-quarter earnings miss and the resulting cut to 2015 guidance last Friday may have shaken&nbsp;investor confidence in large-cap biotech stocks, but Gilead's &quot;beat and raise&quot; shouldn't draw such complaints.&nbsp;
Ahead of Tuesday's earnings, Gilead shares closed 2% higher to $113.0. The stock is trading up another 3% to $116.75 in the after-hours session.&nbsp;
Worldwide sales of Gilead's hepatitis C drugs Harvoni and Sovaldi were $4.89 billion in the June quarter ($3.44 billion U.S. and $1.45 billion international), besting the $4.3 billion consensus estimate and even beating first-quarter sales of $4.5 billion, which wasn't supposed to happen. Domestic and international were both stronger than expected, the former being a bigger surprise given what looked like slowing prescriptions.&nbsp;
Total revenue in the June quarter rose 26% year over year to $8.2 billion.&nbsp;
On an adjusted basis, Gilead earned $3.15 per share in the June quarter, an increase of 33% from the prior year.&nbsp;
The company raised guidance on 2015 product sales to the range of $29-30 billion from $28-29 billion.<P></P>
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareGILDTue, 28 Jul 2015 14:23 GMThttp://www.thestreet.com/story/13234108/1/struggling-sanofi-sends-cancer-sos-to-regeneron-and-another-vanity-biotech-ipo-launches.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13234108/1/struggling-sanofi-sends-cancer-sos-to-regeneron-and-another-vanity-biotech-ipo-launches.html?cm_ven=RSSFeed
Struggling Sanofi Sends Cancer SOS to Regeneron and Another Vanity Biotech IPO Launches<p>NEW YORK (TheStreet) -- It's a day that ends in &quot;day,&quot; which means cancer immunotherapy is dominating the biotech news.
The answer to almost every Sanofi&nbsp;
question about drug research and development appears to be, &quot;Just write a big check to Len.&quot;
Len is Leonard Schleifer, CEO of Regeneron Pharmaceuticals , the large-cap biotech company which also serves as struggling Sanofi's de facto drug developer.
On Tuesday, the two companies paired up again, this time in a big-money collaboration to develop new cancer immunotherapies. Financial terms of the deal can be found here, but all you really need to know is that Sanofi badly trails its Big Pharma brethren in developing drugs that harness a patient's immune system to target and kill cancer cells. While Bristol-Myers Squibb
, Merck
and Roche
lead the way in the development of checkpoint inhibitors and other cancer immunotherapies, Sanofi has done essentially nothing. Sanofi is desperate, so now it's paying huge sums of cash to Regeneron, hoping to catch up in cancer.
In yet another illustration of the investment mania for all things cancer, biotech billionaire Patrick Soon-Shiong's latest business venture makes its public debut Tuesday as the largest biotech initial public offering ever. [The previous &quot;largest biotech IPO ever&quot; was Alzheimer's play Axovant Sciences
, which is now trading below its offering price.]
NantKwest
priced 8.3 million shares at $25 per share, raising $207 million and valuing the cancer immunotherapy company at $2.6 billion. The IPO was 25 times over-subscribed, according to a healthcare investor who put in for an allocation. Early reports showed that NantKwest will open at $35 per share.
If you must know, NantKwest is developing drugs which aim to harness the body's &quot;natural killer&quot; cells to find and kill tumors. The company's work is early, highly speculative and probably way over-valued by the market already, but investors are likely more drawn to the company's IPO because of the involvement of Soon-Shiong, the &quot;world's richest doctor&quot; and a billionaire many times over thanks in large part to a cancer drug called Abraxane which he sold to Celgene
for almost $3 billion.
Few people knew about NantKwest last year when it was known as Conkwest, but then Soon-Shiong invested, took over as CEO and plugged the rebranded company into his intermingled (and confusing) network of &quot;Nant&quot; healthcare and technology businesses.
I'm sure the bankers' investor pitch for NatKwest went something like this, &quot;Don't worry about what they do, it's Patrick Soon-Shiong. How much do you want?&quot;<P></P>
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareSNYREGNMon, 27 Jul 2015 16:42 GMThttp://www.thestreet.com/story/13232603/1/gilead-can-soothe-biotech-investor-fears-with-great-2q-earnings.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13232603/1/gilead-can-soothe-biotech-investor-fears-with-great-2q-earnings.html?cm_ven=RSSFeed
Gilead Can Soothe Biotech Investor Fears with Great 2Q Earnings<p>FOSTER CITY, Calif. (TheStreet) -- Dear Gilead Sciences
:
Please report boffo second-quarter earnings and raise guidance for the rest of the year.
Love and kisses&nbsp;--
Anxious Biotech Investors.
It's probably hyperbolic to say the fate of the entire biotech sector wrests on the shoulders of Gilead, but the importance of Tuesday's earnings report has ramped even higher following Biogen's big miss&nbsp;and guidance cut on Friday. Investor confidence in the ability of large-cap biotech stocks to &quot;beat and raise&quot; is a bit shaky at the moment.
Gilead has the opportunity&nbsp;to set minds at ease by throwing down some big second-quarter numbers and assuring everyone that there's a lot more profits to be wrung out of its hepatitis C franchise. A blockbuster, transformative acquisition wouldn't hurt, either.
Heading into the earnings call, Gilead shares were down nearly 2% to $110.64, trimming its 2015 advance to 17%. Analysts, on average, expect Gilead to post adjusted earnings of $2.70 per share on total revenue of $7.59 billion in the June quarter.
Just as important will be the performance of Gilead's two hepatitis C drugs, Harvoni&nbsp;and Sovaldi. The consensus June quarter sales estimate is $4.39 billion worldwide ($3.1 billion U.S. and $1.2 billion ex-U.S.) This compares to first-quarter sales of $4.5 billion worldwide.
The total number of prescriptions written for Gilead's Sovaldi and Harvoni in the U.S. peaked in March and are now in a consistent flattening downtrend, according to IMS Health. Last Friday, Abbvie
executives said they see an annual run rate of about 180,000 genotype 1 Hep C patients in the U.S. On prior calls, Gilead has predicted an annual run rate of around 240,000 genotype 1 patients.
Investors will feel a lot better if Gilead, on Tuesday night's call, reiterates its prior treatment forecast for U.S. genotype 1 patients.
The Street will also be happy if Gilead's ex-U.S. Hep C sales come in strong and the company talks up future growth prospects. Sales of Harvoni and Sovaldi outside the U.S. are very important if Gilead is going to meet or exceed the $17.5 billion and $17.3 billion in Hep C sales expected for 2015 and 2016.
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Outside of the numbers, investors will be listening closely to hear how Gilead executives respond to the inevitable question, &quot;Who are you going to buy and when?&quot; The Street has been anticipating a big Gilead acquisition since the beginning of the year. Conventional wisdom says Gilead needs to buy future growth because the Hep C business is going away eventually. (When, exactly, Hep C revenues disappear is a matter of debate.)
On a price-to-earnings basis, Gilead trades at a discount&nbsp;to other large-cap biotechs stocks because of the uncertainty about post-Hep C revenue and earnings.
Investors want Gilead to make a deal -- and a good one. Taken together, that's not too much to expect from one company, is it?<P></P>
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsEarnings PreviewsHealth CareOpinionABBVMon, 27 Jul 2015 14:30 GMThttp://www.thestreet.com/story/13232172/1/biogens-possible-takeout-targets-and-other-key-questions-after-blow-up.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13232172/1/biogens-possible-takeout-targets-and-other-key-questions-after-blow-up.html?cm_ven=RSSFeed
Biogen's Possible Takeout Targets and Other Key Questions After Blow-Up<p>BOSTON (TheStreet) -- Four questions for investors to ponder in the wake of Biogen's
&nbsp;blow-up:
1.&nbsp;Will Biogen buy itself back into investors' good graces?
With $4.5 billion in cash and the ability to double or triple that amount by assuming&nbsp;relatively cheap debt, Biogen has the balance sheet&nbsp;to make acquisitions. Buying quality assets or an entire company is a good way of mending fences with investors. Celgene
, Alexion Pharmaceuticals
and Abbvie
have all been rewarded with higher stock prices after making deals this year.
Isis Pharmaceuticals&nbsp;
might be the most obvious Biogen takeout target given its existing partnership, but is it the smart move? Biogen is getting dinged lately, in part because investor confidence in its existing late-stage pipeline -- aducanumab and anti-LINGO -- is shaken. But would buying a company such as Isis, with an unproven technology and a track record of developing drugs that don't sell particularly well, serve to assuage Wall Street concerns?
If not Isis, Biogen could try to outbid Celgene for Receptos
. Or, Biogen could buy Neurocrine Biosciences
or Acadia Pharmaceuticals
. Taking out Sarepta Therapeutics
or Bluebird Bio
would certainly get tongues wagging.
2.&nbsp;Does a weakened Biogen become a target?
This is where I get to re-pitch one of my black swan predictions for 2015: Pfizer
buying Biogen and relocating its corporate headquarters from New York to the heart of the biotech universe, Kendall Square, Cambridge, Mass. Such a deal seemed crazy in January but not now, right? J.P. Morgan analyst Cory Kasimov points out that Genzyme, Immunex and Chiron -- all large-cap biotechs at one time -- were acquired by Big Pharma during a period of weakness.
3.&nbsp;Is there anything in Biogen's existing pipeline that investors can get excited about and possibly save the company?
Yes, but nothing in the near term. Results from a Tysabri phase III study in secondary progressive multiple sclerosis are expected before the end of the year, but the odds of positive results are relatively low. A phase II study of the nerve repair drug anti-LINGO in multiple sclerosis are coming in the middle of next year. Biogen is just beginning the phase III study of aducanumab so results aren't likely until the end of 2017 or early 2018. Eisai (with Biogen as a partner) is developing two different Alzheimer's drugs, a BACE inhibitor E2609 and an amyloid-targeted monoclonal antibody BAN2401. Data from ongoing phase II studies could be announced in the first quarter 2016.
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4.&nbsp;Did Biogen &quot;kitchen sink&quot; its existing multiple sclerosis franchise?
If you're a Biogen bull&nbsp;or an opportunistic investor eyeing a potential a rebound, you hope management went overboard with the new 2015 guidance of 6-8% revenue growth (from 14-16% and consensus of 13%). If Tecfidera and the rest of the MS franchise rebounds in the second half of the year, Biogen's stock price could still recover.<P></P>
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsGoogle Editor's PicksHealth CareOpinionBIIBNBIXISISSRPTRCPTWed, 22 Jul 2015 14:41 GMThttp://www.thestreet.com/story/13227340/1/xoma-is-a-biotech-zombie-in-need-of-a-kill-shot-to-the-head.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13227340/1/xoma-is-a-biotech-zombie-in-need-of-a-kill-shot-to-the-head.html?cm_ven=RSSFeed
Xoma is a Biotech Zombie in Need of a Kill Shot to the Head<p>BERKELEY, Calif. (TheStreet) -- Xoma
was founded in 1981. In the ensuing 34 years, the small&nbsp;biotech company has never developed or secured the approval of a drug on its own.
The incredible Xoma losing streak continued Wednesday with the failure of another late-stage clinical trial. Gevokizumab, Xoma's latest and best hope for drug-development success, came up short in a study involving patients with Behcet's disease uveitis, an inflammatory disorder which can lead to blindness.
Xoma shares plunged 72% to $1.21 on the negative gevokizumab announcement.
Failure is an inevitable fact of life in the drug-development business, but few companies are as good at screwing up as Xoma. Even more amazing is Xoma's ability to remain in business year after year without accomplishing anything. The New York Times' Andy Pollack described Xoma as a &quot;biotech zombie&quot; in an excellent 2007 article.
There is no other industry other than biotech where a company with a money-losing track record like Xoma could exist for so long.
Perhaps Xoma should switch strategies and develop a drug to treat futility. It would be a blockbuster!
I'm sure the folks at Xoma are hard working and they mean well, but at some point, shouldn't they come to the realization that developing drugs is not their forte? Thirty-four years is a really long time. I understand the paycheck is good -- Xoma's CEO John Varian made more than $3 million in total compensation last year -- but not at the cost of torturing investors.
For those without a calculator, Xoma shares have lost 99.7% of their value since 1991.
Xoma executives held a conference call Wednesday morning to explain the gevokizumab setback. A lot of excuses were offered. The placebo worked better than expected, etc., etc. Varian talked up the rest of the company's pipeline and promised Xoma can bounce back.
&quot;I am determined to see Xoma succeed,&quot; he said.
Enough already.
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&nbsp;<P></P>
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareRed FlagsWed, 22 Jul 2015 11:00 GMThttp://www.thestreet.com/story/13226409/1/eli-lillys-solanezumab-is-the-alzheimers-drug-equivalent-of-the-internet-dress.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13226409/1/eli-lillys-solanezumab-is-the-alzheimers-drug-equivalent-of-the-internet-dress.html?cm_ven=RSSFeed
Eli Lilly's Solanezumab is the Alzheimer's Drug Equivalent of the Internet Dress<p>WASHINGTON, D.C. (TheStreet) -- Remember&nbsp;the dress that took over the Internet last winter? To some people, the dress was most definitely blue and black, others insisted the dress was white and gold. People saw different colors in the dress based on their perceptions of the image and how their brains processed that information.
Eli Lilly's&nbsp;
solanezumab is the Alzheimer's drug equivalent of the Internet dress. New data disclosed Wednesday has some people seeing hope that solanezumab, if used early enough, can slow the declines in cognition, memory and function that are the terrible hallmarks of Alzheimer's.
Others looking at the same solanezumab data see not much of anything. The drug appears to be safe, but it's not benefiting Alzheimer's patients in a meaningful way.
The new, contentious solanezumab data come from from Lilly's EXPEDITION-EXT study, to be presented Wednesday afternoon at the&nbsp;Alzheimer's Association International Conference in Washington, D.C. Lilly announced the sola data in a press announcement ahead of the presentation. The full study results were also published in the medical journal Alzheimer's &amp; Dementia.
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Lilly shares&nbsp;closed Tuesday down 2.5% to $85.72, ahead of Wednesday's data. However, shares of the pharmaceutical giant are up 24% this year, due in large part to investor excitement about the Alzheimer's program and high expectations for positive solaneuzumab (sola, for short)&nbsp;study results.
In an extended analysis of two large but negative clinical trials, Lilly scientists conclude that mild Alzheimer's patients who start treatment with sola early lose cognition and function at a slower rate than similar patients who start taking the drug later. The inability of &quot;delayed-start&quot; sola patients to catch up to early sola starters suggests the drug is having a positive, modifying effect on Alzheimer's, Lilly says.
Using a delayed-start trial design to assess the potential for a drug to slow disease progression has been tried before, but the sola results are the first time it's been used successfully with Alzheimer's patients, says Hong Liu-Seifert, the Lilly scientist who led the EXPEDITION-EXT study.
&quot;The results support the potential benefit of starting treatment with solanezumab earlier rather than later in disease progression, and suggest there is persistence of treatment effect after the delayed-start patients are given the drug,&quot; said Dr. Paul Aisen, director of the Alzheimer's Therapeutics Research Institute at the University of Southern California, in a statement.
But not all Alzheimer's experts share Lilly and Aisen's optimistic view of the sola delayed-start data. An Alzheimer's doctor at the AAIC conference, who asked not be named because he didn't want to criticize colleagues publicly, views the small differences in measurements of cognition and function between early- and delayed-start sola patients to be clinically meaningless.
He also believes Lilly leaned heavily on extensive &quot;modeling&quot; of the raw data and unproven but generous statistical methods to reach its positive conclusions. &quot;What we're seeing here is not a disease modifying effect,&quot; he says.
In the EXPEDITION-EXT study, mild Alzheimer's patients who received sola in the failed EXPEDITION 1 and 2 studies for 18 months continued on the drug for another two years. The mild patients treated originally with placebo crossed over to treatment with sola, also for two years. Would the treatment benefit in cognition and function seen in sola-treated patients compared to placebo patients persist even after all patients were taking the drug?
Lilly&nbsp;says yes. Six months into the extension study and based on a pre-defined statistical margin, the cognitive and function measures for early-start sola patients were preserved compared to delayed-start patients. The treatment difference was maintained through one year.
The following chart from the EXPEDITION-EXT study being presented Wednesday tracks changes over time on the ADAS-Cog14, a measure of cognition used with mild Alzheimer's patients. At 108 weeks (six months into the extension study), the early-start sola patients scored 1.75 points higher on the ADAS-Cog14 test compared to delayed-start patients. At 132 weeks (one year into the extension study), the treatment difference between the groups is 1.91 points on the ADAS-Cog14 test. These are small improvements suggesting sola is slowing Alzheimer's disease progression, although critics call the findings clinically marginal or meaningless.
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&nbsp;
&quot;What I believe we've shown is placebo patients lose more brain cells to the degenerative process of Alzheimer's, so even when they're switched over to [sola], they can't catch up because they've lost brain cells that can never come back. This is why the [sola] treatment difference persists,&quot; says Eric Siemers, another Lilly scientist involved in the study.
Siemers acknowledges some limitations and weaknesses to the sola study conclusions, most notably that the delayed-start analysis was retrospective and hinged on data from two negative studies. The conclusion that delayed-start sola patients aren't catching up to early treaters might simply be statistical noise.
Dr. Maria Carillo, chief science officer for the Alzheimer's Association, views Lilly's EXPEDITION-EXT results with cautious optimism.
&quot;I think the data show hopefulness for the approach... but you can't draw too many conclusions,&quot; Carillo says. &quot;This is not a blockbuster cure, but it may be slowing down the decline&quot; in Alzheimer's patients, she adds.
Lilly's sola is an antibody targeting beta amyloid, a sticky protein that clumps together to form nerve-deadening plaques in the brain. Scientists have long assumed sopping up beta amyloid in the bloodstream and removing amyloid plaques from the brain should improve cognition, memory and function in Alzheimer's patients.
Unfortunately, the &quot;beta amyloid hypothesis&quot; has fallen short in clinical trials. To date, none of the amyloid-targeting antibodies have been able to demonstrate a significant cognitive or functional benefit compared to placebo in phase III clinical trials involving thousands of Alzheimer's patients.&nbsp;
Despite all the setbacks, the development of beta amyloid antibodies persists because of evidence suggesting the drugs might still benefit patients at the earliest stages of Alzheimer's. Current clinical trials of amyloid-targeting antibodies enroll patients with prodromal and mild Alzheimer's disease. The thinking goes that blocking beta amyloid before it causes significant loss of cognition and memory might produce significantly better (disease modifying) results.
Biogen
stoked&nbsp;renewed investor interest in Alzheimer's with its antibody adacanumab following&nbsp;positive results from a small phase I study presented in March. Updated results from this study are also being presented Wednesday&nbsp;at the AAIC meeting.
The Internet dress turned out to be blue and black. Those who saw white and gold were fooled by their brains.
We won't have a definitive answer about Lilly's solanezumab until late next year, when results from the large phase III study EXPEDITION-3 are released. Biogen only just started a phase III study of aducanumab, so results are still years away.&nbsp;
Must Read: The Biotech Bubble Debate: Solid Science vs. Sky-High Valuations<P></P>
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesDrugsHealth CareLLYMon, 20 Jul 2015 18:10 GMThttp://www.thestreet.com/story/13224276/1/fda-closing-in-on-november-expert-panel-date-for-biomarin-sarepta-drugs.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13224276/1/fda-closing-in-on-november-expert-panel-date-for-biomarin-sarepta-drugs.html?cm_ven=RSSFeed
FDA Closing In on November Expert Panel Date for BioMarin, Sarepta Drugs<p>BOSTON (
TheStreet) -- Biotech investors, circle Nov. 23 and Nov. 24 on your calendars. Use a thick, black marker. These appear to be the tentative dates chosen by the U.S. Food and Drug Administration to convene an advisory panel for the Duchenne muscular dystrophy drugs from
BioMarin Pharmaceuticals
and
Sarepta Therapeutics
.&nbsp;&nbsp;
The FDA's&nbsp;calendar of
2015 Advisory Committee Tentative Meetings&nbsp;was just updated with a Nov. 23-24 slot for the Peripheral and Central Nervous System Drugs Advisory Committee, which is the expert panel likely to be reviewing BioMarin's drisapersen and Sarepta's eteplirsen. No other information is provided in the FDA Web update and an agency spokesperson declined to offer any other information pending a listing in the Federal Register.&nbsp;
Investors were expecting an FDA panel for the DMD drugs, but nailing down an exact date has been guesswork.&nbsp;
The FDA has already accepted BioMarin's drisapersen filing with an approval decision date set for Dec. 27. Sarepta submitted the eteplirsen filing on June 29 and still awaits the FDA's formal acceptance and an approval decision date.&nbsp;
The FDA advisory panel covering the DMD drugs will be one of the&nbsp;most closely followed and dramatic regulatory events ever seen in biotech. Simply put, this is an epic event for biotech investors, whatever the date.&nbsp;
But right now, it looks as if the&nbsp;FDA is settling on Nov. 23-24, right before Thanksgiving.<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/BMRN.html?cm_ven=rss_ticker">BMRN</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareSRPTMon, 20 Jul 2015 11:01 GMThttp://www.thestreet.com/story/13223186/1/exelixis-scores-much-needed-kidney-cancer-study-to-boost-drug-sales.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13223186/1/exelixis-scores-much-needed-kidney-cancer-study-to-boost-drug-sales.html?cm_ven=RSSFeed
Exelixis Scores Much-Needed Kidney Cancer Study to Boost Drug Sales<p>SOUTH SAN FRANCISCO, Calif. (TheStreet) -- The Exelixis
cancer drug Cometriq scored a decisive, much-needed victory in a late-stage trial of kidney cancer patients, setting the stage for an expanded approval next year and a significant bump in commercial sales.
In the phase III study known as &quot;METEOR,&quot; Cometriq achieved the primary endpoint of delaying tumor progression or death compared to the Novartis
drug Afinitor, Exelixis said Monday. The study enrolled patients with metastatic kidney cancer previously treated with at least one VEGF-targeted drug, such as Pfizer's
Sutent.
Cometriq also demonstrated a strong trend toward prolonging survival compared to Afinitor, although the analysis was still too immature to reach statistical significance.
Exelixis&nbsp;plans to submit the METEOR kidney cancer data for approval in the U.S. and Europe in early 2016.
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Cometriq is approved as a treatment for medullary thyroid cancer, but generated just $25 million in 2014 sales because the targeted patient population is so small. The positive kidney cancer results announced Monday represent the latest and best opportunity for Exelixis to boost Cometriq revenue following the&nbsp;disappointing failure of prostate cancer studies last year.
Exelixis says the commercial opportunity for Cometriq in kidney cancer is significant, with approximately 17,000 eligible second-line patients in the U.S. and 37,000 patients globally. In 2014, Novartis' Afinitor&nbsp;sales for kidney cancer totaled a bit more than $400 million, Exelixis estimates.
The METEOR study randomized 658 second-line kidney cancer patients to treatment with Cometriq or Afinitor. At the time of the primary analysis, Cometriq reduced the risk of tumor progression or death (progression-free survival) by 42% compared to Afinitor, achieving the primary endpoint with statistical significance.
Cometriq benefited kidney cancer patients more than Exelixis expected based on the design of the study, which assumed the drug would reduce the risk of tumor progression or death by 33% compared to Afinitor.
On the survival analysis, Cometriq reduced the risk of death by 33% compared to Afinitor, but the difference was not statistically significant. The METEOR trial will continue and another analysis of survival will be conducted in 2016.
The frequency of serious adverse events reported in the study were &quot;approximately balanced&quot; between Cometriq and Afinitor, Exelixis said, without disclosing details. The rate of treatment discontinuation due to adverse events was 10% in both study arms.
Exelixis intends to present more detailed results from the METEOR study at an upcoming medical conference, the company said.
Hitting the progression-free survival, or PFS, primary endpoint with a strong trend toward a survival benefit should help Exelixis greatly when it makes the case for expanding Cometriq's approval into kidney cancer.
The FDA has used PFS as the basis for approving six of seven kidney cancer drugs. The only exception was Aveo
Oncology's tivozanib, which&nbsp;the FDA rejected because the PFS benefit was confounded by shorter survival. Exelixis doesn't have a Special Protocol Assessment for the METEOR study, but the company says the trial design and endpoints were &quot;discussed&quot; with regulators in the U.S. and Europe.
Exelixis is conducting additional clinical trials of Cometriq in first-line kidney cancer and liver cancer. The company is also waiting on the FDA approval decision, expected Nov. 11, for the skin cancer drug cobimetinib, which is being developed under a partnership with Roche/Genentech
.
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareRHHBYAVEONVSEXELFri, 17 Jul 2015 10:45 GMThttp://www.thestreet.com/story/13221599/1/biotech-stock-mailbag-alzheimers-conference-preview-why-stock-prices-sometimes-lie.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13221599/1/biotech-stock-mailbag-alzheimers-conference-preview-why-stock-prices-sometimes-lie.html?cm_ven=RSSFeed
Biotech Stock Mailbag: Alzheimer's Conference Preview, Why Stock Prices Sometimes Lie<p>&nbsp;
BOSTON (TheStreet) --&nbsp;Welcome back to another Biotech Stock Mailbag. Tomas R. writes,
&quot;Your preview of the Biogen
Alzheimer's data was helpful. What can you say also about Eli Lilly's
expected presentation at the meeting?&quot;
&nbsp;
The Alzheimer's Association International Conference (AAIC) running July 18-23 is a welcome respite from what is normally the slow season for medical meetings. This year's AAIC meeting is particularly newsy given the planned presentations from Biogen and Eli Lilly.
Both companies are developing antibodies targeting beta amyloid, a sticky protein that clumps together to form nerve-deadening plaques in the brain. Scientists have long assumed sopping up beta amyloid in the bloodstream and removing amyloid plaques from the brain should improve cognition, memory and function in Alzheimer's patients.
Unfortunately, the &quot;beta amyloid hypothesis&quot; has fallen short in clinical trials. To date, none of the amyloid-targeting antibodies have been able to demonstrate a significant cognitive or functional benefit compared to placebo in phase III clinical trials involving thousands of Alzheimer's patients.
Despite all the setbacks, the development of beta amyloid antibodies persists because of evidence suggesting the drugs might still benefit patients at the earliest stages of Alzheimer's. Current clinical trials of amyloid-targeting antibodies enroll patients with prodromal and mild Alzheimer's disease. The thinking goes that blocking beta amyloid before it causes significant loss of cognition and memory might produce significantly better (disease modifying) results.
Biogen stoked renewed investor interest in Alzheimer's with its antibody adacanumab following positive results from a small phase I study presented in March. Updated results from this study will be presented on July 22 at the AAIC meeting. You can read my preview of the new Biogen adacanumab data here.
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Lilly's antibody solanezumab (sola) has run a classic course through Alzheimer's clinical development. Two large phase III studies (EXPEDITION 1 and 2) comparing sola against placebo in patients with mild and moderate Alzheimer's failed to show any difference in cognition or function. But when Lilly scientists pried apart the EXPEDITION 1 and 2 studies, they found evidence that mild Alzheimer's patients benefited from treatment with sola. When data in mild Alzheimer's patients from both phase III studies were pooled together, sola produced a statistically significant improvement across three different measures of cognition and one of two measures of function.
These kinds of post-hoc analyses are susceptible to bias and are therefore not strong enough to convince regulators to approve an Alzheimer's drug. Lilly is now conducting another large randomized, placebo-controlled phase III study of sola, enrolling only mild Alzheimer's patients, in order to confirm the benefit seen in the retrospective analyses of the earlier, failed studies. Results from this sola study, known as EXPEDITION-3, are expected next year. Lilly needs EXPEDITION-3 to succeed for regulatory approval of sola in Alzheimer's.
In the interim, Lilly is presenting at AAIC next week results from a two-year extension of the EXPEDITION 1 and 2 studies which could provide additional evidence supporting sola's ability to modify the course of Alzheimer's.
In the EXPEDITION-EXT study, mild Alzheimer's patients who received sola in EXPEDITION 1 and 2 for 18 months continue on the drug for another two years. The mild patients treated originally with placebo crossover to treatment with sola, also for two years. The analysis Lilly is conducting in EXPEDITION-EXT will compare the cognition and function of the patients starting on sola early versus patients who started on sola late.
If sola is disease-modifying, the early patients (those treated with sola continuously for three and half years) should fare better than the late or delayed-start patients (those treated with the drug for 2 years.) Said another way, the positive treatment difference observed between sola and placebo in mild Alzheimer's patients from EXPEDITION 1 and 2 after 18 months should be maintained (at least partially) through the added two years of EXPEDITION-EXT.
This is not to say delayed-start sola patients won't benefit at all. The mild Alzheimer's patients who started on placebo and then switched to sola should show some improvement in cognition and function, too, if the drug is active.
Lilly's sola EXPEDITION-EXT presentation is scheduled for July 22.
Justin L. writes, &quot;You and your short buddies are getting your asses kicked and I love it. Nobody cares about your bashing anymore, so just keep whining about overvalued biotech stocks so the rest of us can laugh at you.&quot;
Greenlight Capital's David Einhorn sent his second-quarter letter&nbsp;to investors this week. This line stood out to me:
&quot;In today's market, the best performing stocks are companies with exciting stories where accountability is in the distant future.&quot;
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Einhorn was referring to Netflix
and how the stock moves higher&nbsp;relentlessly despite reporting lower earnings and higher spending. Netflix investors don't care about fundamentals. Instead, they're enthralled by the Netflix story: Original content, streaming and the demise of traditional television.
He could have easily been describing biotech stocks. Substitute Intrexon
or its cousin Ziopharm Oncology
for Netflix and Einhorn's comment still rings true, maybe even more so. Biotech investors are in love with a good story and they're not much concerned if the available clinicals don't quite live up to the hype just yet. This market is defined by the mantra, &quot;buy first, worry about fundamentals later,&quot; if ever.
Does anyone honestly believe that every single company developing cancer immunotherapies today will produce approvable, blockbuster products? Of course not, yet that's not stopping companies with preclinical or early-stage drugs from selling initial public offerings at multi-billion dollar valuations. (Hello NantKwest.)
Juno Therapeutics
and Kite Pharma
&nbsp;are the darlings of the CAR-T world, and deservedly so, but they're also being rewarded with market caps which assume huge success for programs still early and filled with risk.
The &quot;what me, worry?&quot; investor mentality is pervasive in biotech and drug stocks, even in companies dealing with federal investigations. Insys Therapeutics
is at the center of federal investigations into&nbsp;allegations of corrupt drug-marketing practices and insurance fraud. Recently, a nurse practitioner pled guilty to accepting bribes in exchange for prescribing Insys' narcotic painkiller Subsys.
Other doctors -- top Subsys prescribers -- have been arrested on charges of health care fraud, as thoroughly documented&nbsp;in eye-popping detail&nbsp;by Roddy Boyd, a crackerjack investigative business reporter. Bad news doesn't matter. Insys' stock price grinds higher as if nothing is wrong.
I understand Justin's desire to gloat. The iShares Nasdaq Biotechnology ETF (IBB) is up an astounding 9% just in the past six trading days, reaching an all-time high. The SPDR S&amp;P Biotech ETF (XBI) has increased 11% in the same time period, also trading at an all-time high. I'd just warn him that all stories have an ending, and in biotech that ending is often ugly.
In hyper-bullish markets like today's where everyone is bullish and risks are ignored, I often re-read a column&nbsp;written years ago by my friend and former colleague Herb Greenberg&nbsp;to understand why stocks sometimes act in ways which defy fundamentals (or in biotech, the laws of gravity.) Here's my favorite part:
Don't confuse stocks and companies. They sometimes go in opposite directions. Stocks sometimes really do lie. Sometimes they are pushed artificially higher by a rotation by investors from one industry group to another, because that one sector happens to be in favor. Sometimes they lie because of short squeezes, which occur when short sellers -- who bet stock prices will fall -- are for some reason forced to rapidly purchase the shares they sold short. And sometimes they lie because of momentum. Momentum can take stocks to infinity and beyond, but true believers can wind up learning that momentum has a dark side: It is called reverse momentum, and it tends to kick in when you least expect.
Must Read: 5 High-Dividend Telecom Stocks To Buy<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/LLY.html?cm_ven=rss_ticker">LLY</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsGoogle Editor's PicksHealth CareOpinionINSYXONLLYJUNOWed, 15 Jul 2015 13:45 GMThttp://www.thestreet.com/story/13219282/1/thoughts-appraisals-lingering-questions-from-celgenes-7b-receptos-buy.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13219282/1/thoughts-appraisals-lingering-questions-from-celgenes-7b-receptos-buy.html?cm_ven=RSSFeed
Thoughts, Appraisals, Lingering Questions from Celgene's $7B Receptos Buy<p>BOSTON (TheStreet) -- Thoughts, appraisals and lingering questions from Celgene's
decision to acquire Receptos
for $7.2 billion:Celgene's is paying $232 per share for Receptos, a 12% premium to Tuesday's close. &quot;The premium kind of sucks,&quot; one very long Receptos investor grumbled to me via text message. But Receptos shares were up almost 70% year to date and 450% over the past year, so don't complain too much.
If you believe Receptos' ozanimod has $4 billion to 6 billion in peak sales potential for the multiple sclerosis and ulcerative colitis indications (Celgene's estimate), the $7.2 billion purchase price is a bargain. The deal looks even better for Celgene if ozanimod expands successfully into other immune-related diseases such as&nbsp;Crohn's.
Ozanimod is one of the most compelling late-stage assets in biotech&nbsp;based on results from phase II studies. Phase III studies are underway, so clinical risk remains, but Celgene looks smart Wednesday.
Celgene is spending $7.2 billion to buy Receptos, resulting in an $8 billion bump to its market valuation in early Wednesday trading. Will this positive market reaction encourage a higher, competing bid for Receptos?
Buying Receptos helps Celgene further diversify its pipeline to become less reliant on the multiple myeloma drug Revlimid for a majority of its revenue and profits. Diversifying from Revlimid becomes really important to Celgene when the drug loses patent protection in 2020 (or possibly sooner depending on the outcome of ongoing patent litigation.)
Bringing ozanimod into the pipeline adds a new wrinkle to the ongoing investor debate over the future of mongersen, Celgene's important Crohn's disease candidate. Is Celgene buying Receptos because management no longer has confidence in mongersen's potential? It's a plausible explanation, although Celgene reiterated support for mongersen on its conference call Tuesday night. If mongersen is fine, Celgene should make every effort to disclose or present the phase II endoscopy data as soon as possible, instead of waiting for 2017.
Where is Gilead Sciences'
transformative M&amp;A deal? Celgene's acquisition of Receptos doesn't necessarily alter Gilead's strategy but it does raise the anxiety level for investors counting on Gilead to do something big to fill the post-hepatitis C revenue gap. It's quite possible Gilead is looking around at potential acquisitions and can't justify the price tags. Expect a lot of questions about M&amp;A on Gilead's upcoming second-quarter earnings call.
How's this for a new biotech bull market rule? All biotech companies with phase III drugs will now trade at takeout valuations. Biotech companies with wholly-owned phase III drugs will trade at 2x takeout valuations.
Receptos was not in receipt of a takeout offer when large shareholder and board seat holder Lilly Ventures sold a portion of its company holdings on June 12, confirmed Receptos CFO Graham Copper. I feel somewhat vindicated for writing that the insider sale meant an imminent takeout was unlikely. [Yes, the definition of &quot;imminent&quot; is up for interpretation.]
However, the Lilly Ventures decision to sell Receptos stock last month is another reminder that predicting future outcomes based on insider buying or selling is an imperfect science. Receptos has long been a takeout target for good reasons. Celgene moved very quickly.
We'll learn how quickly when the deal tick-tock is disclosed in an SEC filing<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/CELG.html?cm_ven=rss_ticker">CELG</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareRCPTCELGMon, 13 Jul 2015 16:01 GMThttp://www.thestreet.com/story/13216240/1/gilead-hep-c-sales-under-investor-microscope-as-earnings-near.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13216240/1/gilead-hep-c-sales-under-investor-microscope-as-earnings-near.html?cm_ven=RSSFeed
Gilead Hep C Sales Under Investor Microscope as Earnings Near<p>FOSTER CITY, Calif. (TheStreet) -- The total number of prescriptions written for Gilead Sciences&nbsp;
hepatitis C drugs Sovaldi and Harvoni in the U.S. peaked in March and are now in a consistent downtrend, according to IMS Health. This isn't likely to be a problem for Gilead's second-quarter results due later this month, but unless hepatitis C prescriptions pick up (Harvoni, especially), consensus estimates for the rest of 2015 and 2016 might be at risk.
The consensus (sell-side) second-quarter estimate for Gilead's hepatitis C franchise is $3.1 billion in the U.S. and $4.3 billion worldwide. Actual first-quarter sales were $4.5 billion worldwide.Gilead should have little problem meeting or exceeding second-quarter expectations for hepatitis C sales. Instead, investor focus is on what management says on the upcoming earnings call about future sales to better judge if the $17.5 billion and $17.3 billion in Sovaldi/Harvoni worldwide sales expected for 2015 and 2016 are at risk. Investors expects U.S. hepatitis C sales to decline and sales in the rest of the world to accelerate, but are U.S. sales declining too far, too fast?
Gilead's stock price is up 22% year to date, second best among large-cap biotechs, so &quot;worries&quot; about the company are all relative. Still, the stock has performed well this year mostly due to ongoing share repurchases and investor anticipation for a large, transformative acquisition yet to happen.
Even with the stock's stellar performance, Gilead's 2016 price-to-earnings (P/E) multiple of 10 is lower than the average 24 P/E for the large-cap biotech peer group, meaning investors are waiting anxiously to hear details for the company's growth plans in the inevitable post-hepatitis C years.
<P></P>
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareMon, 13 Jul 2015 11:35 GMThttp://www.thestreet.com/story/13215495/1/anacor-prescription-lotion-clears-skin-rash-in-late-stage-test.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13215495/1/anacor-prescription-lotion-clears-skin-rash-in-late-stage-test.html?cm_ven=RSSFeed
Anacor Prescription Lotion Clears Skin Rash in Late-Stage Test<p>PALO ALTO, Calif. (TheStreet) -- An experimental topical lotion developed by Anacor Pharmaceuticals
cleared eczema skin rash better than a placebo, according to results from two late-stage clinical trials announced Monday.
Anacor intends to seek U.S. approval for the lotion, known as crisaborole, in the first half of next year, based on the data collected from the studies.
Shares of Anacor were up 57% to $133.02 in Monday's premarket session, driven by the crisaborole results and takeover speculation.&nbsp;Anacor's stock had already jumped 162% this year in anticipation of the crisaborole study results, giving the company a market value of $3.7 billion before Monday's announcement.
Anacor conducted two phase III studies, each enrolling 750 patients with mild to moderate atopic dermatitis, better known as eczema. The patients were randomized two-to-one to receive crisaborole applied to the infected skin twice per day or a placebo control lotion.
After one month of treatment, 32.8% and 31.4% of patients responded to crisaborole in the two studies, compared to 25.4% and 18% of patients in the control group. The difference in responses in both studies was statistically significant, favoring crisaborole.
Response was defined by a physician's assessment that the eczema skin rash was clear or almost clear at day 29, with at least a two-grade improvement from baseline.Atopic dermatitis is a chronic skin rash which causes inflammation and itching. Anacor says 18 million to 25 million people in the U.S. suffer from the disease, which is typically treated with generic steroid lotions. Crisaborole was not compared to steroid lotions directly in the phase III studies.&nbsp;
Rivals&nbsp;Regeneron Pharmaceuticals
and Celgene
are also developing drugs to treat atopic dermatitis. Anacor already has one approved drug, Kerydin, which is used to treat toenail fungus. A subsidiary of
Novartis
sells Kerydin in the U.S., where it&nbsp;
competes against
Valeant Pharmaceuticals'
Jublia.
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareANACREGNNVSCELGThu, 09 Jul 2015 16:26 GMThttp://www.thestreet.com/story/13211724/1/northwest-bio-shareholders-may-have-been-undercut-by-ceo.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13211724/1/northwest-bio-shareholders-may-have-been-undercut-by-ceo.html?cm_ven=RSSFeed
Northwest Bio Shareholders May Have Been Undercut by CEO<p>BETHESDA, Md. (TheStreet) -- Northwest Biotherapeutics
CEO Linda Powers&nbsp;is selling company stock at large discounts to repay loans made to&nbsp;an affiliated, privately held company she controls.
Some of the money private investors loaned to Powers' private company, Cognate BioServices, was used to pay for Northwest Bio programs.&nbsp;The loans were later repaid by Cognate with Northwest Bio stock priced significantly below market value, allowing the investors to double their money in one year, according to a new filing&nbsp;with the Securities and Exchange Commission.
Cognate is the cellular processing firm majority owned by Powers through a venture capital firm. She is also chairperson, CEO, principal financial officer and largest shareholder of Northwest Bio, which pays Cognate to manufacture its experimental cancer vaccines and perform other research and development duties.The unusual structure of the loans negotiated by Powers does not violate securities laws. Lending money to Cognate, however, allowed the investors to receive more generous repayment terms with less disclosure than if they had dealt directly with Northwest Bio, where some of their money ended up anyway. And the discounted Northwest Bio stock used by Powers to repay the Cognate loans undermined the market value of the stock held by other investors. Independent auditors have previously warned investors about problems with Northwest Bio's internal auditing and financial reporting procedures. Among many &quot;material weaknesses&quot; of the company, auditors cited related party transactions Powers negotiates with herself as both the company's CEO and as the majority owner of Cognate, according to Northwest Bio's most recent annual report filed in March.
Now comes new details about financial deals in which Powers' Cognate acts as a de facto cash-transfer agent between unidentified investors&nbsp;and Northwest Bio. The loans were disclosed in an SEC Form 4&nbsp;filed July 2 by Powers in her role as a Cognate director.
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In June and July 2014, an investor lent Cognate $5 million, structured as two convertible loans of $2.5 million apiece. The $5 million lent by the investor to Cognate was passed through to fund Northwest Bio programs. One year later, on June 30, 2015, Cognate repaid the loans. Instead of cash, the investor received 1,118,092 shares of Northwest Bio stock owned by Cognate, according to the SEC filing.
On the day of the loan conversion, Northwest Bio shares closed $9.93, which valued the shares received by the investor at more than $11.1 million. The shares are freely tradable.The same SEC filing also documents a separate convertible debt deal in which an investor lent Cognate $3 million, later repaid with Northwest Bio stock owned by Cognate valued at $6.4 million.
In total, $8 million in loans to Cognate were repaid with Northwest Biotherapeutics stock valued at more than $17 million.
The investor(s) who received the generous repayment terms on their loans are not identified in the SEC filing and Northwest Bio did not respond to questions about the financings.
The identity of the investors is important because proceeds of two of the Cognate loans negotiated by Powers were funneled to Northwest Bio programs. The repayment terms of the loans also show Powers negotiating financing deals that undercut the value of Northwest Bio shares, while providing the investors with a 100%-plus return on their initial investment. This may have been Powers'&nbsp;only or best way to raise money for Northwest Bio programs at that time, but the company hasn't explained why.
The two convertible loans totaling $5 million that were repaid with 1.1 million shares of Northwest Bio stock sets the effective conversion rate -- when negotiated in June and July 2014 -- at $4.47 per share.
But during that two-month period, Northwest Bio stock traded at a low of $5.71 per share and a high of $7.66 per share.
In effect, Powers, using Cognate as a middleman, raised $5 million for Northwest Bio at a 20%-40% discount to its stock price at that time. Whether or not proceeds from the separate $3 million convertible loan were also passed through to Northwest Bio was not disclosed in the SEC filing.
Only by using Cognate as the financing vehicle -- and not dealing directly with Northwest Bio -- was the investor able to secure the generous repayment terms. Had the investor negotiated directly with Northwest Bio, the conversion price on any convertible loan would have been set at a premium to the current value of the stock -- standard practice for such financings dictated by the fiduciary responsibilities to current shareholders.
As of June 30, Cognate held 18.4 million shares of Northwest Bio plus another 10.4 million shares underlying warrants currently exercisable, according to SEC filings. When Cognate performs work for Northwest Bio, payment is made with a mix of cash and stock.&nbsp;In 2014, Northwest Bio paid Cognate $18.7 million in cash and another $21.3 million in stock-based compensation for work performed -- almost half the company's' total R&amp;D expenses for the year, according to related-party transactions disclosed in Northwest Bio's annual report filed with the SEC. The Northwest Bio shares used to compensate Cognate are set a fixed price of $4 -- a large discount to the prevailing market price.
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.BiotechDrugsGoogle Editor's PicksHealth CareThu, 09 Jul 2015 14:31 GMThttp://www.thestreet.com/story/13212080/1/previewing-the-next-look-at-biogens-alzheimers-drug.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13212080/1/previewing-the-next-look-at-biogens-alzheimers-drug.html?cm_ven=RSSFeed
Previewing the Next Look at Biogen's Alzheimer's Drug<p>Correction: The date of the aducanumab presentation is July 22, not July 18 as previously stated.CAMBRIDGE, Mass. (TheStreet) -- Get ready for Act 2 of Biogen
: The Alzheimer's Story.
On Wednesday, July 22, Biogen will present updated results from a closely watched clinical trial involving its Alzheimer's drug candidate aducanumab (formerly known as BIIB037.) Investors first saw aducanumab data from this study in March. The results were both spectacular and controversial.
Treatment with aducanumab led to a statistically significant improvement in cognition compared to placebo in patients with mild Alzheimer's. A large number of&nbsp;aducanumab-treated patients also experienced potentially worrisome brain swelling. The early-stage study only enrolled a small number of Alzheimer's patients, which means the drug's benefit might not hold up when a larger study is conducted. [The graveyard of Alzheimer's drug research is filled with drugs which looked great early but blew up late.] Overall, investors cheered the March aducanumab results because they buoyed hopes that an amyloid plaque-busting Alzheimer's drug might finally work after years of failures. For Biogen, aducanumab has the potential to generate billions of dollars in new revenue. Let's take a look at the two main efficacy slides from the March aducanumab study presentation&nbsp;to better understand 1) the importance of the July 22 update; &nbsp;and 2) frame investor expectations. First up is the chart depicting aducanumab's effect on the Clinical Dementia Rating (CDR-sb) scale, a measure of cognition. Pay close attention to the red line representing Alzheimer's patients treated with a 6 mg dose of aducanumab.
Must Read: 7 Stocks Warren Buffett Is Buying in 2015
The red line (6 mg aducanumab) stops at 26 weeks. On July 22, we'll get more data tracking&nbsp;performance of these patients out to 54 weeks, matching the results we already have for patients treated with 1 mg, 3 mg and 10 mg doses of aducanumab, plus placebo.&nbsp;
A positive dose response is ideal, so the best outcome for the July 22 update will have the 6 mg dose of aducanumab landing somewhere between the green line (3 mg dose) and the dark blue line (10 mg dose) at 54 weeks. Alarm bells might go off if the 6 mg dose significantly underperforms the 3 mg dose. If the 6 mg dose doesn't beat the 1 mg dose (the light blue line) or even worse, looks like a placebo (the orange line), Biogen is in trouble and the stock will fall. [Sell-side analysts will still come to the defense of Biogen even if the aducanumab update looks bad because that's what they do.]This next chart tracks aducanumab's effect on the Mini-Mental State Exam, another measure of Alzheimer's-related cognition.
Notice how the red line (6 mg dose) overlaps the orange placebo line up to 24 weeks. That's a big &quot;uh oh.&quot;&nbsp;You'd expect the 6 mg dose to behave more like the 3 mg and 10 mg doses, but that was not the case here when these data were presented in March. Like with the CDR, it will be comforting to see patients on the 6 mg dose diverge from placebo on the MMSE scale when we see the 52-week data on July 22. Can the 6 mg dose catch up completely so that its effect on MMSE resembles the 10 mg dose? We'll see soon enough.&nbsp;The impressive efficacy of aducanumab demonstrated last March was marred somewhat by safety risks. The incidence of amyloid-related imaging abnormalities (ARIA), a form of brain swelling, was the most frequently reported adverse event in the study.&nbsp;In Alzheimer's patients who carry the AopeE4 gene, which puts them at higher risk for the disease, the rate of ARIA was 43% and 55% for the 3 mg and 10 mg&nbsp;doses of aducanumab, respectively. This led to treatment discontinuation in 10% of patients on the 3 mg&nbsp;dose and 35% of patients on the&nbsp;10 mg dose.&nbsp;Lower ARIA rates are better, so on July 22 investors will be paying attention to the safety of the 6 mg dose of aducanumab to see if its better tolerated than the 10 mg dose.&nbsp;
Must Read: Benchmark's 13 Stocks to Buy for the Rest of 2015
Unless the updated results from the 6 mg dose of aducanumab look absolutely awful, don't expect much change in investor sentiment about Biogen and its Alzheimer's program. The company has already started a large, phase III study of aducanumab set to enroll 1,350 prodromal&nbsp;Alzheimer's patients. Results could be ready in the middle of 2018.<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/BIIB.html?cm_ven=rss_ticker">BIIB</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.BiotechDrugsHealth CareOpinionTue, 07 Jul 2015 11:43 GMThttp://www.thestreet.com/story/13209308/1/blame-keryx-executives-not-short-sellers-for-dismal-drug-launch-sinking-stock.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13209308/1/blame-keryx-executives-not-short-sellers-for-dismal-drug-launch-sinking-stock.html?cm_ven=RSSFeed
Blame Keryx Executives, Not Short Sellers, for Dismal Drug Launch, Sinking Stock<p>BOSTON (TheStreet) -- Boston Business Journal healthcare reporter Don Seiffert believes short sellers are manipulating Keryx Biopharmaceuticals
, causing its stock price to falI. Seiffert speaks to Keryx executives regularly, and they insist the company is doing great, he writes Monday. But despite all the good news, Keryx's stock price just keeps dropping.
The same terrible thing is happening to Sarepta Therapeutics
and Ovascience
, Seiffert says.
&quot;I can find no other explanation for those stock drops than the manipulation of short sellers,&quot; he says. In case you weren't clear on where he stands on short selling, Seiffert adds, &quot;The fact that they [Keryx, Sarepta and Ovascience] are developing products that stand a good chance of saving or improving lives that [sic] makes the actions of short sellers morally indefensible in my mind.&quot;
Let's just say I have issues with Seiffert's blame game. Short sellers -- &quot;manipulative&quot; or otherwise -- are not responsible for Keryx's withering stock price. The problem is Auryxia, the company's kidney dialysis drug. Dialysis clinics aren't buying Auryxia. The drug's commercial launch -- now six months old -- is a total bust. Investors track Auryxia prescriptions reported weekly via services like IMS Health. The Auryxia prescription numbers are tiny, worse even than the commercial launch of MannKind's
inhaled insulin Afrezza, if you can believe it.
How awful is the Auryxia launch? When Keryx secured the drug's approval last September, analysts, on average, forecast total revenue of approximately $100 million in 2015 and $213 million in 2016, according to S&amp;P Capital IQ. Today, the analyst consensus estimates for Keryx total revenue are cut to to $25 million and $118 million for 2015 and 2016, respectively.
Sell-side analysts, by nature, are bullish, so when they're forced to chop revenue estimates, investors run for the hills.
At Monday's $9.68 close, Keryx shares are down 32% year to date and 46% since FDA approved Auryxia. Seiffert might be scratching his head over the decline in Keryx's stock price but investors aren't similarly confused. They see a company losing money because of a drug failing to generate meaningful sales. Even with the big drop in its stock price, Keryx still retains a market value of $1 billion, or more than eight times projected 2016 revenue.
Instead of accusing short sellers of manipulating Keryx's stock price (without any evidence) or preventing doctors from prescribing Auryxia (how would they go about doing that, exactly?), Seiffert should be criticizing company executives for their poor performance. Keryx, and no one else, is responsible for the stock's decline. Other than getting Auryxia approved, essentially nothing former Keryx CEO Ron Bentsur promised about Auryxia has proven true. [Bentsur exited Keryx prior to Auryxia's disastrous launch, but not before selling company stock worth millions of dollars -- another red flag.]
In contrast, the Keryx bear thesis has proven to be remarkably prescient.<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/KERX.html?cm_ven=rss_ticker">KERX</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsGoogle Editor's PicksHealth CareTue, 07 Jul 2015 11:29 GMThttp://www.thestreet.com/story/13209483/1/horizon-goes-hostile-with-3b-takeout-offer-for-depomed.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13209483/1/horizon-goes-hostile-with-3b-takeout-offer-for-depomed.html?cm_ven=RSSFeed
Horizon Goes Hostile With $3B Takeout Offer for Depomed<p>DUBLIN, Ireland (TheStreet) -- Horizon Pharmaceuticals
, the Irish drug company, has gone public with&nbsp;a $3 billion offer to acquire fellow drug maker Depomed
after efforts to negotiate a takeover privately were rebuffed.
Under terms of the all-stock deal, Horizon proposes to acquire Depomed for $29.95 per share, or a 42% premium to the closing price of Depomed on July 6. The deal, if closed, would be accretive immediately to Horizon's earnings, the company said.
&quot;Despite our repeated attempts beginning in March to engage Depomed's management and board of directors in friendly and confidential discussions, Depomed's management and board have refused to engage in discussions with us and rejected our proposal,&quot; said Horizon CEO Tim Walbert, in a statement.
Depomed has not commented on the hostile takeover bid.
Horizon's acquisition of&nbsp;Depomed would create a combined company with 13 approved drugs, nearly doubling Horizon's current portfolio. Projected 2015 net sales and adjusted earnings of the combined companies would be $950 million and $350 million, respectively, Horizon said.
Like other specialty pharmaceutical makers headquartered in tax-friendly countries, Horizon is buying growth. Over the past two years, Horizon has acquired four companies, most recently Hyperion Therapeutics in March.
Must Read: The Biotech Bubble Debate: Solid Science vs. Sky-High Valuations<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/HZNP.html?cm_ven=rss_ticker">HZNP</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.Deal NewsDrugsHealth CareMergers and AquisitionsDEPOThu, 02 Jul 2015 18:36 GMThttp://www.thestreet.com/story/13207387/1/vertex-wins-us-approval-for-new-cystic-fibrosis-drug.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13207387/1/vertex-wins-us-approval-for-new-cystic-fibrosis-drug.html?cm_ven=RSSFeed
Vertex Wins U.S. Approval for New Cystic Fibrosis Drug<p>BOSTON (TheStreet) --&nbsp;Vertex Pharmaceuticals&nbsp;
&nbsp;set the price of its newly approved cystic fibrosis drug Orkambi at $259,000 per year, on the upper end of investor predictions.&nbsp;The U.S. Food and Drug Administration approved Orkambi Thursday. The Vertex pill, taken twice per day, is targeted at a genetic defect found in almost half of cystic fibrosis patients. Orkambi sales are expected to transform Vertex into a sustainably profitable company for the first time since its founding in 1989.
In approving Orkambi, the FDA concurred with&nbsp;the positive recommendation from a panel of outside experts who voted 12-1 in May that two large clinical trials conducted by Vertex provided sufficient evidence to support the efficacy and safety of the drug. European drug regulators are also reviewing Orkambi with an approval decision expected in the fourth quarter.Vertex shares were halted at $130.95 ahead of the Orkambi announcement.&nbsp;
The $259,000 annual price for Okrambi is slightly higher than the predicted&nbsp;Orkambi gross price (before negotiated insurance discounts) in the range of $230,000 to $250,000 per year, according to a survey of investors conducted by Evercore ISI analyst Mark Schoenebaum. The actual or net price of Orkambi will be lower depending on the discounts and rebates offered to insurance companies. Between 35-40% of cystic fibrosis patients eligible for Orkambi today are insured by Medicaid.Kalydeco, Vertex's other cystic fibrosis drug, is priced at $312,000 per year but with discounts, the net price is around $220,000 per year.
The Orkambi commercial launch will be closely watched for any reimbursement pushback or protests about the Orkambi price from insurance companies and pharmacy benefit managers.
Vertex is one of the biotech sector's largest companies by market cap but is still not profitable. Orkambi is supposed to stop Vertex's money-burning ways quickly. Current analyst consensus has Vertex losing $1.12 per share this year but earning $4.54 per share in 2016, according to S&amp;P CapitalIQ.Total Vertex revenue in 2015 will total $982 million and grow to $2.7 billion in 2016, according to consensus estimates compiled by S&amp;P CapitalIQ. Vertex revenue will come from Orkambi and Kalydeco, the company's currently approved cystic fibrosis drug.
Orkambi is a single pill which combines ivacaftor, the active ingredient in Kalydeco, with a second drug, lumacaftor. The drug is designed to work against the underlying genetic defect found in about half of the 70,000 cystic fibrosis patients worldwide. The initial approval for Orkambi will cover patients 12 years or older, which includes about 8,500 patients in the U.S. Eventually, Vertex expects to broaden Orkambi's label to include younger patients.
The efficacy of Orkambi was demonstrated in two phase III studies in which lung function improved by about three percentage points over placebo. At the FDA advisory committee meeting held in May, some experts criticized Orkambi for offering only modest improvement in lung function. The FDA also raised concerns that the phase III studies might have failed if Orkambi had been compared against Kalydeco alone instead of a placebo.&nbsp;Vertex and cystic fibrosis patients argued that even a small improvement in lung function was clinically meaningful. Orkambi&nbsp;also reduced the number of damaging lung exacerbations experienced by cystic fibrosis patients and helped them gain weight.&quot;More than 15 years ago, our scientists set out to discover and develop medicines to treat the underlying cause of cystic fibrosis. Today, the approval of Orkambi represents a fundamental change in the treatment of the most common form of CF, marking significant progress for us and for the entire CF community,&quot; said Vertex CEO Jeff Leiden, in a statement. &quot;While we celebrate this important step forward, we also recognize that two out of three patients in the U.S. still do not have a medicine to treat the underlying cause of their disease. We share their urgency and are committed to continuing our significant investment in research and development to discover new medicines for them and to improve upon what we offer patients today.&quot;&quot;We applaud the FDA for its swift approval of Orkambi... It is our hope that everyone who is prescribed this drug will have immediate access to it so they can begin to live longer, healthier lives,&quot; said Cystic Fibrosis Foundation CEO Robert Beall, in a statement. The CF Foundation contributed to the development of ivacaftor and lumacaftor.&nbsp;<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/VRTX.html?cm_ven=rss_ticker">VRTX</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareThu, 02 Jul 2015 16:54 GMThttp://www.thestreet.com/story/13207196/1/biotech-stock-mailbag-grading-2015-biotech-predictions-at-the-halfway-point.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13207196/1/biotech-stock-mailbag-grading-2015-biotech-predictions-at-the-halfway-point.html?cm_ven=RSSFeed
Biotech Stock Mailbag: Grading 2015 Biotech Predictions at the Halfway Point<p>BOSTON (
TheStreet) -- This week's Biotech Stock Mailbag is abbreviated and delivered a day early due to the Fourth of July. Happy hot dogs and fireworks, everyone!&nbsp;
@adamfeuerstein Let's get a halftime update! http://t.co/JPWkryFMrz #nomulligans — Joe Hetland (@joehetland)
July 1, 2015
The mid-point of the year is a good time to look back to see how well I'm doing with the
biotech predictions published last January. And agreed, no mulligans!
1. Gilead Sciences
will buy Bristol-Myers Squibb
. Or Juno Therapeutics
. Maybe Kite Pharma
. Okay,
I'm not sure exactly which company Gilead will buy, but the acquisition focus will be oncology and it will be transformative, just as Pharmasset was for its hepatitis C business.
Nothing yet, and Juno's almost definitely off the Gilead shopping list following the Celgene
tie-up announced this week. Conventional Wall Street wisdom going into this year had Gilead expanding its oncology business via acquisition. Six months into 2015, I wonder if Gilead looks at the universe of available oncology targets but can't justify the lofty price tags relative to the commercial potential. We know Gilead has the money and isn't afraid to spend it, but oncology is much more competitive than hepatitis C. Perhaps Gilead is unwilling to spend more to potentially get less?
There's still plenty of time this year for Gilead to make a big M&amp;A splash. Meantime, sitting on its hands hasn't hurt the stock.. Gilead and Regeneron Pharmaceuticals
are the best-performing large-cap biotech stocks at the midpoint of the year.2. By the end of the year, Sanofi
will jettison MannKind
and its failed inhaled insulin Afrezza.
Contractually, Jan. 1, 2016, is the earliest date Sanofi can terminate the MannKind Afrezza partnership. Technically, this renders my prediction wrong. [My bad for not reading the fine print of the contract.] In my defense, the thinking behind the prediction has certainly rung true in the first six months of the year. Afrezza prescriptions and sales are off to a horrible start, which makes me more confident than ever that Sanofi will divorce itself from MannKind when it can in 2016.3. The U.S. Food and Drug Administration approves the first drug to treat Duchenne muscular dystrophy: Santhera's
Raxone.
I'll be right only if Sarepta Therapeutics
and BioMarin Pharma
fall short with their respective DMD drugs -- both now under review at the FDA. [Santhera has not yet submitted Raxone.]4.&nbsp;Mark Ahn lands another biotech CEO job, which starts the countdown clock towards his inevitable firing.
Trust me, this prediction is a no brainer.5. Puma Biotechnology
is not acquired.
So far, so good. I feel more confident about this prediction today&nbsp;than I was in January.6. Bluebird Bio's
gene therapy cures sickle cell disease. Or, new clinical data presented this year suggest strongly that this will happen in the near future.
Nailed it.7. One or more CAR-T therapy companies suffer a clinical development (safety? efficacy?) setback.
Nope.8. After a night of heavy drinking, Dirk Haussecker's obsession with RNA interference goes overboard when he gets a tattoo of Stanley Crooke's face on his lower back. Isis Pharma &nbsp;issues a press release and the stock soars to an all-time high.
The only reason this happened yet is because Dirk wants Stanley to do the actual tattooing.
9. Biosimilars launch in the U.S. but at least one product is later recalled and pulled from the market due to a serious patient safety issue.
Biosimilars are here but too early for problems? I'll take an incomplete.10. Celgene will be the top-performing, large-cap biotech stock.
Celgene is up 7% for the year, the third-worst large-cap performer behind Alexion Pharmaceuticals ALXN and Amgen&nbsp;
. I picked the wrong horse, so far.11. Cuban biotech companies become as popular as the country's baseball players.
This CNBC article on investments in Cuba suggests I'm not wrong, just too early.12. Pharmacy benefit managers restrict popular rheumatoid arthritis and multiple sclerosis drugs from their formularies to stop companies from pushing through automatic and unjustified bi-annual price hikes.
Express Scripts ESRX hasn't yet nailed Biogen &nbsp;for jacking up the price of Avonex every four months, but the warning signs are all there.13. Pfizer
&nbsp;buys Biogen&nbsp;and relocates corporate headquarters to Cambridge, Mass., from New York City.
I must have been drinking.
14.&nbsp;Deutsche Bank analyst Robyn Karnauskas will use a &quot;blue sky&quot; analysis to value one of the biotech companies on her coverage list. [This is my low-hanging, guaranteed-to-be-right prediction for 2015.]
Not just blue skies, turquoise blue skies!
15.&nbsp;Weak, disappointing drug launches for Vanda Pharma
and Keryx Pharma
. [A holdover prediction from last year.]Vanda is down 12% for the year; Keryx is down 31%. Anyone hearing super-fantastic things about their respective drug launches? I didn't think so.
Have a nice, long weekend.&nbsp;<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/MNKD.html?cm_ven=rss_ticker">MNKD</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsGoogle Editor's PicksHealth CareGILDMNKDPBYIKERXCELGTue, 30 Jun 2015 15:27 GMThttp://www.thestreet.com/story/13203821/1/mannkinds-afrezza-lags-behind-biggest-failure-in-inhaled-insulin.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13203821/1/mannkinds-afrezza-lags-behind-biggest-failure-in-inhaled-insulin.html?cm_ven=RSSFeed
MannKind's Afrezza Lags Behind Biggest Failure in Inhaled Insulin<p>BOSTON (TheStreet) -- The number of prescriptions written for MannKind's
inhaled insulin drug Afrezza have&nbsp;barely made&nbsp;a dent in the diabetes market since partner Sanofi
&nbsp;launched the product five months ago.
Afrezza is even underperforming Exubera, the first inhaled insulin drug, launched by Pfizer in 2006. Exubera was a commercial failure, forcing Pfizer
to abandon the product after one year.
Must Read: 5 Health Care Stocks John Paulson Is Betting On for 2015
Here's a graphical representation of just how badly MannKind's Afrezza is performing relative to other diabetes drugs.
The three lines clustered tightly together at the bottom of the chart represent the number of Afrezza prescriptions written weekly since launched in early February, as reported by healthcare data providers IMS Health and Bloomberg (Symphony).
The light blue line with the &quot;X&quot; hashmarks represents the number of prescriptions written for Exubera at the start of its launch in 2006. Afrezza prescriptions today are lagging behind that track. MannKind claims&nbsp;Afrezza is superior in every way to Exubera, and therefore should succeed where Exubera failed. However, almost five months into its launch, MannKind's promise rings hollow.&nbsp;
The purple line in the chart zooming into orbit tracks prescriptions written for Tanzeum, a GLP-1 injection marketed by GlaxoSmithKline
. Tanzeum isn't insulin, but it's included in this comparison because it helps illustrate Sanofi's poor job marketing Afrezza.
Must Read:&nbsp;Buy These 6 Risky Pharmaceutical Stocks for Big Upside Potential
Tanzeum is a me-too drug in the GLP-1 class of diabetes products.&nbsp;It requires an injection. Glaxo has almost no experience marketing diabetes drugs. Tanzeum isn't benefiting from social media buzz, and sales expectations for it are nil. Yet, Tanzeum is doing quite well since launch.&nbsp;
Afrezza is supposed to be the next great diabetes product, a convenient inhaled insulin. It's the only inhaled insulin on the market, sold by a company with extensive experience and expertise in diabetes treatments. If you believe MannKind and its supporters, Afrezza is a game-changing insulin with enormously positive word-of-mouth endorsements across the Internet and social media. Yet Afrezza&nbsp;isn't selling.&nbsp;
The second quarter closes tonight, which means Sanofi will soon report earnings, including sales from its diabetes business unit. In the first quarter, Sanofi reported Afrezza sales of $1.1 million, although inventory spend was not broken out. The second quarter represents the first full quarter of Afrezza's launch and should give a more accurate picture of current demand.&nbsp;
MannKind supporters&nbsp;will likely make more excuses for whatever Sanofi reports for Afrezza sales later this summer. The reaction to poor weekly prescription reports so far from the Al Mann peanut gallery has been, &quot;Sanofi is conducting a controlled [slow] launch on purpose.&quot; A digital and print advertising campaign for Afrezza is about to kick off, which has MannKind shareholders hopeful more marketing dollars spent will boost lagging prescriptions.&nbsp;
Perhaps Afrezza might even start beating Exubera.
One more noteworthy set of numbers: Afrezza is having no impact at all on market share of competing injectable, mealtime insulins.
As compiled by Bank of America/Merrill Lynch from IMS Health data, the market share for Sanofi's Apidra is unchanged at 2.9% since Afrezza hit the market. The market share of Eli Lilly's
Humalog has increased from 40.78% to 40.96%. Likewise, market share for Novo Nordisk's
Novolog franchise has risen from&nbsp;46.39% to 46.54%.&nbsp;
Afrezza's market share: 0.10%.
Must Read:&nbsp;3 Pharmaceutical Stocks to Sell Now<P></P>
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CarePFELLYGSKSNYMNKDMon, 29 Jun 2015 21:10 GMThttp://www.thestreet.com/story/13202940/1/celgene-is-desperate-or-insane-to-pay-ultra-high-premium-for-juno-partnership.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13202940/1/celgene-is-desperate-or-insane-to-pay-ultra-high-premium-for-juno-partnership.html?cm_ven=RSSFeed
Celgene is Desperate or Insane to Pay Ultra-High Premium for Juno Partnership<p>SUMMIT, NJ (TheStreet) -- Celgene
was known as the savviest collaborative deal maker in biotech. That honorific has to be called into question after Celgene announced a plan Monday to buy a $1 billion, stake in Juno Therapeutics
and its CAR-T cancer immunotherapy platform at more than twice Juno's current market value.
Under terms of the 10-year collaboration, Celgene is buying 9.1 million shares of Juno at $93 per share -- a 102% premium to Juno's closing price of $46.30. Juno will also receive a $150 million upfront licensing fee from Celgene.
For its investment, Celgene secures an option to be the ex-U.S. commercialization partner for Juno's platform of CAR-T cancer immunotherapies targeting certain blood cancers, plus other potential co-development and marketing rights.
The partnership is a tremendous show of support for Juno as it battles Novartis
, Kite Pharma
, Bluebird Bio
and other companies developing therapies which use re-engineered T cells to identify and kill cancer cells.
But investors will undoubtedly raise questions about the high price paid by Celgene to get into bed with Juno, especially since CAR-T therapies are still years from the market in certain blood cancers and may never be an effective treatment for solid tumors. Celgene's investment feels desperate unless a competitive bidding process forced the company to open the wallet super wide.
&quot;Bottom line is we like that Celgene is making a big commitment to CAR-T as we think this will be an important hematological platform in the future -- but certainly would agree with the likely pending consensus view that the price tag is also big,&quot; writes RBC Capital analyst Michael Yee in a note issued after the deal was announced.
Celgene shares closed Monday at $114.91 and were unchanged in after-hours trading. Juno shares are up 40% to $64.34 in after-hours trading.<P></P>
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareKITEJUNONVSCELGMon, 29 Jun 2015 15:06 GMThttp://www.thestreet.com/story/13202200/1/vertex-profits-hinge-on-fda-approving-new-cystic-fibrosis-drug-this-week.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13202200/1/vertex-profits-hinge-on-fda-approving-new-cystic-fibrosis-drug-this-week.html?cm_ven=RSSFeed
Vertex Profits Hinge on FDA Approving New Cystic Fibrosis Drug This Week<p>BOSTON (TheStreet) -- Vertex Pharmaceuticals
is widely expected to win U.S. approval later this week for a new drug which could one day treat almost half of cystic fibrosis patients.
Sales of the new Vertex cystic fibrosis drug, Orkambi, are also expected to transform Vertex into a sustainably profitable company for the first time since its founding in 1989.
The U.S. Food and Drug Administration has until July 5 to issue an approval decision on Orkambi, barring any surprise delays. The agency is expected to follow the positive recommendation from a panel of outside experts who voted 12-1 in May that two large clinical trials conducted by Vertex provided sufficient evidence to support the efficacy and safety of Orkambi.
European drug regulators are also reviewing Orkambi with an approval decision expected in the fourth quarter.
If investors have already factored Orkambi's approval into their view of Vertex, there's still uncertainty over the cystic fibrosis therapy's price and the trajectory of the commercial launch which needs to be settled.
Vertex is expected to set the Orkambi gross price (before negotiated insurance discounts) in the range of $230,000 to $250,000 per year, according to a survey of investors conducted by Evercore ISI analyst Mark Schoenebaum.
The Orkambi commercial launch will be closely watched for any reimbursement pushback or protests about the Orkambi price from insurance companies and pharmacy benefit managers.
Vertex is one of the biotech sector's largest companies by market cap but is still not profitable. Orkambi is supposed to stop Vertex's money-burning ways quickly. Current analyst consensus has Vertex losing $1.12 per share this year but earning $4.54 per share in 2016, according to S&amp;P CapitalIQ.Total Vertex revenue in 2015 will total $982 million and grow to $2.7 billion in 2016, according to consensus estimates compiled by S&amp;P CapitalIQ. Vertex revenue will come from Orkambi and Kalydeco, the company's currently approved cystic fibrosis drug.Vertex shares were down 2% to $124.28 in Monday trading. Vertex shares have traded as high as $135 this year.
Orkambi is a single pill which combines ivacaftor, the active ingredient in Kalydeco, with a second drug, lumacaftor. The drug is designed to work against the underlying genetic defect found in about half of the 70,000 cystic fibrosis patients worldwide. The initial approval for Orkambi will cover patients 12 years or older, which includes about 8,500 patients in the U.S. Eventually, Vertex expects to broaden Orkambi's label to include younger patients.
The efficacy of Orkambi was demonstrated in two phase III studies in which lung function improved by about three percentage points over placebo. At the FDA advisory committee meeting held in May, some experts criticized Orkambi for offering only modest improvement in lung function. The FDA also raised concerns that the phase III studies might have failed if Orkambi had been compared against Kalydeco alone instead of a placebo.&nbsp;Vertex and cystic fibrosis patients argued that even a small improvement in lung function was clinically meaningful. Orkambi&nbsp;also reduced the number of damaging lung exacerbations experienced by cystic fibrosis patients and helped them gain weight.<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/VRTX.html?cm_ven=rss_ticker">VRTX</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareMon, 29 Jun 2015 11:02 GMThttp://www.thestreet.com/story/13201482/1/sarepta-submits-dmd-drug-for-fda-approval-review.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13201482/1/sarepta-submits-dmd-drug-for-fda-approval-review.html?cm_ven=RSSFeed
Sarepta Submits DMD Drug for FDA Approval Review<p>CAMBRIDGE, Mass. (TheStreet) -- Sarepta Therapeutics
completed the submission of a new drug application to U.S. regulators seeking the approval of eteplirsen for the treatment of patients with Duchenne muscular dystrophy, or DMD, the company announced Monday.
Getting eteplirsen filed with the U.S. Food and Drug Administration in the middle of the year, as promised, allows new Sarepta CEO Ed Kaye to put a check mark next to a hugely important item on the company's to-do list.&nbsp;Sarepta still has a lot to get done, but eteplirsen is now on track for an FDA approval decision in the first quarter of next year.
Sarepta is just two months behind rival BioMarin Pharmaceuticals
, which submitted its competing DMD drug drisapersen to the FDA at the end of April. The&nbsp;BioMarin FDA filing includes results from a failed phase III study re-analyzed to show a drisapersen benefit for a subset of enrolled DMD patients.
On Monday, BioMarin announced the FDA acceptance of the drisapersen filing under&nbsp;priority review. The FDA approval decision date for drisapersen is Dec. 27.&nbsp;
The FDA is expected to convene a panel of outside experts in the fourth quarter to review the Sarepta and BioMarin drugs and offer guidance to the agency on whether or not the drugs deserve to be approved. An official announcement of an FDA advisory panel covering the DMD drugs has not yet been made but will likely come relatively soon after the agency accepts Sarepta's eteplirsen filing in 60 days.
The clinical portion of Sarepta's eteplirsen filing relies most heavily on results from a small phase II study in which 12 DMD boys administered the drug once per week have maintained an ability to walk far longer than what is typically seen with untreated DMD patients.
As anyone following Sarepta knows by now, the eteplirsen data are controversial because of the way the study was conducted and the small number of DMD patients enrolled. The company is also relying on additional supportive data from muscle biopsies showing higher levels of dystrophin production, presumably caused by eteplirsen. Dystrophin is a protein that plays a key role in muscle function and repair. The genetic inability to make dystrophin is what causes DMD. Sarepta's eteplirsen is designed to &quot;skip over&quot; the section of damaged gene in DMD patients and restore the gene's ability to produce partially functioning dystrophin.
Sarepta's original plan to seek FDA approval for eteplirsen in late 2014 was put on hold because the FDA raised questions about the reliability of the dystrophin production data. The relationship between Sarepta and the FDA soured, which in turn played a part in the&nbsp;departure of former CEO Chris Garabedian. Sarepta's stock price fell sharply because of its uncertain future.
Kaye, Sarepta's former chief medical officer, became the company's new CEO in March and immediately took steps to mend fences with the FDA and win back the trust of investors. At a meeting held in May, Sarepta was able to alleviate FDA concerns about the way dystrophin production was being measured in eteplirsen-treated patients, as well as provide the agency with additional information requested. After the meeting, the FDA told Sarepta that eteplirsen could be filed for approval. Sarepta's stock price has almost rebounded fully to where it traded last year before the eteplirsen filing delay was announced.
The eteplirsen application is now submitted to FDA but Sarepta must still complete a dystrophin production analysis from a fourth set of muscle biopsies taken from patients. These data, along with 192-week walk performance results from patients in the phase II study, will be submitted to the FDA during the review process, the company said.
In conjunction with the completed eteplirsen FDA submission, Sarepta also raised $20 million in debt from a new $40 million debt agreement.
Must Read: J.P. Morgan's 6 Top Biotech and Pharmaceuticals Stocks<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/SRPT.html?cm_ven=rss_ticker">SRPT</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareSRPTFri, 26 Jun 2015 10:01 GMThttp://www.thestreet.com/story/13199783/1/biotech-stock-mailbag-exelixis-puma-bio.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13199783/1/biotech-stock-mailbag-exelixis-puma-bio.html?cm_ven=RSSFeed
Biotech Stock Mailbag: Exelixis, Puma Bio<p>&nbsp;
BOSTON (TheStreet) -- This week's Biotech Stock Mailbag examines the next stock-moving catalysts for Exelixis
and Puma Biotechnology
. No hate mail this week, sorry.&nbsp;
@adamfeuerstein Hi Adam, any thought at all on $EXEL — jdubbs (@jweil130)
June 23, 2015
In July, Exelixis&nbsp;is expected to announce results from the &quot;METEOR&quot; phase III study of Cometriq in second-line kidney cancer. This study is Exelixis' next chance to transform Cometriq into a commercially successful cancer drug following the failure of prostate cancer studies last year. Cometriq is approved as a treatment for medullary thyroid cancer but generated just $25 million in 2014 sales because the targeted patient population is so small.
The METEOR study enrolled 650 patients with kidney cancer who previously received but no longer respond to at least one VEGF-targeted drug, such as Pfizer's Sutent. The enrolled patients are randomized to treatment with either Cometriq or Afinitor, a currently approved kidney cancer drug from Novartis. The study's primary endpoint is progression-free survival (PFS) with overall survival serving as the most important secondary endpoint. The study does not allow Afinitor patients to cross over and receive Cometriq on disease progression -- an important design element which will provide cleaner and more convincing survival data (as long as it's positive.)
Exelixis&nbsp;modeled the study on the assumption that Cometriq could reduce the risk of kidney cancer disease progression or death by 33% compared to Afinitor. At the median, Exelixis assumes Afinitor PFS will be five months and that Cometriq can win with a comparative PFS of 7.5 months.
Will these assumptions hold up? Most of the currently approved kidney cancer drugs, including Afinitor, delay tumor progression by between four and five months in the second-line setting following first-line treatment with Sutent, based on published studies.
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In 2012, Exelixis conducted a single-arm, open-label, phase I study of Cometriq (known then as cabozantinib) in 25 kidney cancer patients previously treated with a median of two prior therapies. Eighty-eight percent of the enrolled patients were treated previously with at least one VEGF-targeted drug, mirroring the patients in the METEOR study. In this phase I study, Cometriq demonstrated a median PFS of 12.9 months and median overall survival of 15 months. The study was presented at the 2012 ASCO annual meeting and published in 2014 in the Annals of Oncology.
Exelixis has built a comfortable cushion into the phase III study to ward off the risk phase I results exaggerated Cometriq's true efficacy in kidney cancer. [A higher dose of the drug was given to patient in the phase I study compared to what's being used in the phase III study.] &nbsp;I give Cometriq better than even odds of showing a PFS benefit over Afinitor but will that be enough to 1) satisfy the FDA secure approval; and 2) convince doctors to prescribe Cometriq over multiple other kidney cancer drugs already approved?
The FDA has used PFS as the basis for approving six of seven kidney cancer drugs. The only exception was Aveo Oncology's tivozanib, which FDA rejected because the PFS benefit was confounded by shorter survival. Exelixis doesn't have a Special Protocol Assessment for the METEOR study but the company says the trial design and endpoints were &quot;discussed&quot; with regulators in the U.S. and Europe.
Overall survival data from the Cometriq METEOR study should be available next year given the need for longer follow-up.
Exelixis says&nbsp;the commercial opportunity for Cometriq in kidney cancer is significant, with approximately 11,000 eligible second-line patients in the U.S. and 37,000 patients globally. In 2014, Afinitor sales in kidney cancer totaled a bit more than $400 million, Exelixis estimates.
Whether Cometriq captures meaningful market share in kidney cancer likely depends on the strength of the data from the METEOR study including the overall survival results to come. With so many drugs already available for doctors to treat their kidney cancer patients, Exelixis needs robust data to make a convincing commercial case. Don't forget the checkpoint inhibitors making their way into kidney cancer as a potential competitive threat, although combination therapies are also possible.Exelixis' stock price should pop higher if the Cometriq METEOR study is a success, but I can also foresee an uptick doing a slow fade given the unanswerable questions (for now) about the drug's regulatory status and commercial potential, plus the company's need to raise more money.
@adamfeuerstein Any thoughts on Puma Biotechnology PBYI, their recent lawsuits and any drug approval concerns? — Jose Rivera (@jriveradpm)
June 23, 2015
Next up for
Puma Bio&nbsp;are results from the NASPB (FB-7) study of neratinib in the neoadjuvant breast cancer setting. Puma guided to top-line data release in the middle of the year (June/July) with a more detailed presentation at a&nbsp;breast cancer meeting in December.
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In breast cancer, neoadjuvant therapy refers to treating patients with tumor-shrinking drugs before primary surgery. The goal is to shrink inoperable tumors enough so they can be removed surgically, or to allow surgeons to remove tumors while still sparing the breast.
The FB-7 neoadjuvant breast cancer study is taking a very long time to complete. Started in 2009, the initial design compared paclitaxel/neratinib against paclitaxel/Herceptin. When Roche won approval for Perjeta as a neoadjuvant breast cancer therapy in 2013, the FB-7 study was amended to include a third arm consisting of paclitaxel, neratinib and Herceptin. However, enrollment in the third arm of the study was delayed because the investigators first had to find a lower neratinib dose which could be better tolerated by patients.
All in, the FB-7 study took more than four years to enroll 141 breast cancer patients. The first two arms of the study were fully enrolled and essentially completed well before the third arm.
The primary endpoint of the neratinib FB-7 study is complete pathologic response (pCR), defined as the absence of invasive cancer in breast tissue or lymph nodes.
For perspective, FDA approved Perjeta as a neoadjuvant breast cancer therapy based on a pCR rate of 39% for Perjeta/Herceptin/docetaxel compared to 21% for Herceptin/docetaxel.
Given neratinib's association with serious and life-threatening diarrhea, the safety data from the FB-7 study will also be scrutinized closely.
Puma's stock price is down almost 40% since the ASCO annual meeting where the neratinib ExteNet study data were presented but not well received. Investor confidence in Puma's ability to win neratinib approval in the adjuvant breast cancer setting is much lower today than it was before the ExteNet data (tiny benefit on disease-free survival plus lots of bad diarrhea) were presented. If Puma can't get neratinib approved, the company's ultimate goal of being acquired is also much less likely to happen.
I've written a lot about the neratinib ExteNet data presented at ASCO already, but there's one more wrinkle in the results which calls into question the credibility of neratinib's reported 2.3 percentage point disease-free benefit.
Let's start with the Kaplan-Meier graph depicting the disease-free survival primary endpoint of Puma's neratinib ExteNet study. I took this photo as it was presented at the ASCO annual meeting earlier this month.
The neratinib and placebo DFS curves separate at approximately three months, after which the two curves remain essentially parallel. This begs the question, what happened at three months to make the curves separate?
It's hard to see in the photo, but take a look at the number of patients at risk, disclosed at the bottom of the graph. At baseline, both arms of the study start with 1,420 patients.
At month three, the number of neratinib patients falls to 1291 -- a 9% decrease. At the same time point, the number of placebo patients falls to 1367 -- a 4% decrease.
Despite losing 9% of neratinib patients at three months, the DFS rate remains pretty close to 100%. This suggests patients were censored or lost to followup.
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In contrast, the smaller 4% decrease in patients in the placebo arm is reflected in a drop in the DFS curve, suggesting these patients had cancer recurrence.
Is it possible that the imbalance in the censored patients at three months is responsible for most or all of the DFS difference observed at 2 years? It's a legitimate question because after the three-month time point, the neratinib and placebo DFS curves remain parallel.&nbsp;Puma cut off the DFS analysis at two years, which some breast cancer experts say is too short to properly vet neratinib in the adjuvant setting (particularly when the high rate of diarrhea is factored in.) Puma is expected to present three-year DFS data from ExteNet at the same breast cancer conference in December where we'll see the FB-7 neoadjuvant study results.<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/EXEL.html?cm_ven=rss_ticker">EXEL</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareOpinionEXELWed, 24 Jun 2015 14:13 GMThttp://www.thestreet.com/story/13197458/1/alcobra-placebo-beats-drug-in-failed-genetic-disease-study.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13197458/1/alcobra-placebo-beats-drug-in-failed-genetic-disease-study.html?cm_ven=RSSFeed
Alcobra Placebo Beats Drug in Failed Genetic Disease Study<p>TEL AVIV, Israel (TheStreet) -- Count with me the ways in which Alcobra's
experimental drug MDX failed to benefit patients with Fragile X syndrome, a genetic disease which causes intellectual and behavioral disabilities:
MDX missed the primary endpoint of the phase II study. In fact, placebo patients performed better, Alcobra admitted.
On two related, secondary endpoints, MDX was also unable to differentiate from placebo.
Alcobra then analyzed the negative study using another five measures of efficacy. On two of these tertiary endpoints, MDX managed to demonstrate a &quot;statistically significant&quot; benefit compared to placebo.
Add it all up: MDX outperformed placebo on two of eight measures of efficacy in Fragile X patients, Alcobra said. On the most important primary efficacy measure, the placebo used in the study beat MDX.
Yaron Daniel, Alcobra's CEO, called this a &quot;positive finding&quot; and a &quot;clinically meaningful advance&quot; for Fragile X patients. I assume he practiced making this claim several times to avoid snickering.
On a conference call Wednesday, Piper Jaffray analyst Charles Duncan congratulated the Alcobra team for the study results, thereby setting a new floor for sell-side shamelessness. Piper Jaffray raised money for Alcobra in January.
Last October, the same Alcobra drug, MDX, failed a study conducted in patients with attention-deficit hyperactivity disorder. Alcobra shares fell from $15 to $3.
Alcobra's stock price recovered this year, more than doubling in value to $8 per share heading into Wednesday's Fragile X study results.
In early Wednesday trading, Alcobra shares are only down 12% to $7.40.
That's your biotech bubble market at work.
<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/ADHD.html?cm_ven=rss_ticker">ADHD</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.BiotechDrugsHealth CareTue, 23 Jun 2015 16:53 GMThttp://www.thestreet.com/story/13196134/1/agenus-gets-billion-dollar-valuation-from-analyst-based-on-cancer-drug-that-doesnt-exist.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13196134/1/agenus-gets-billion-dollar-valuation-from-analyst-based-on-cancer-drug-that-doesnt-exist.html?cm_ven=RSSFeed
Agenus Gets Billion-Dollar Valuation From Analyst Based on Cancer Drug That Doesn't Exist<p>BOSTON (TheStreet) -- We've reached the stage of the biotech bull market where a sell-side analyst can value a company on sales of a cancer drug that doesn't exist.
I'm referring to Christopher Marai, biotech analyst at Oppenheimer &amp; Co. He initiated coverage on Agenus
earlier this month with an outperform rating and a $14 price target, which values the cancer-drug developer at more than $1.2 billion.
Is there a specific Agenus cancer drug, or drugs, which Marai uses to come up with his valuation?
No! Marai just assumes Agenus will successfully develop and secure approval for a placeholder cancer drug at some point in the future. Once on the market, that drug will be a commercial hit.
Marai:
We arrive at our $14/share valuation by applying a 6x multiple (a typical oncology multiple) to our projected 2022 worldwide sales of $1.3 billion for a single novel checkpoint inhibitor being developed by AGEN for the treatment of oncology, discounted 40% annually. We do not assign value to a specific checkpoint or indication at this time, given that the evidence as to which checkpoint may work best for which indication is not clear, despite reasonable evidence that checkpoint inhibitors should have efficacy across a broad range of tumors and augment current treatments in combination. [Emphasis mine.]
Let's unpack this remarkable feat of biotech-valuation hand waving. Marai is telling investors to buy Agenus based on a forecast looking seven years into the future calling for $1.3 billion in sales for a cancer drug he can't name, approved for a specific cancer indication he can't identify.
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Details? Clinical data? Don't be silly, just buy the stock, says Marai, because Agenus possesses an &quot;in-house toolkit of immuno-oncology checkpoint antibodies, anti-tumor vaccines and vaccine adjuvants.&quot; And there are partners, too. Incyte
and Merck
offer &quot;potential access to IDO inhibitors, anti-PD1 and other therapeutics molecules that may augment its full spectrum immuno-oncology program.&quot;
It's biotech buzzword bingo. That plus a pipeline of unnamed drugs still not cleared to begin human clinical trials is justification enough for an outperform rating and a $14 price target.
I certainly understand investors are embracing the biotech sector in a sloppy, wet kiss, with cancer immunotherapy companies on the receiving end of the most love. Agenus shares have more than doubled in value this year. But it would be nice if biotech sell-side analysts like Marai didn't resort to fantasies and wishful thinking to justify buy ratings and billion-dollar market valuations.<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/AGEN.html?cm_ven=rss_ticker">AGEN</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.EquitiesBiotechDrugsHealth CareOpinionMRKINCYFri, 19 Jun 2015 10:00 GMThttp://www.thestreet.com/story/13191937/1/biotech-stock-mailbag-unstoppable-heron-aerie-disclosure-fail-gene-therapy-hate-mail.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13191937/1/biotech-stock-mailbag-unstoppable-heron-aerie-disclosure-fail-gene-therapy-hate-mail.html?cm_ven=RSSFeed
Biotech Stock Mailbag: Unstoppable Heron, Aerie Disclosure Fail, Gene Therapy, Hate Mail!<p>BOSTON (TheStreet) -- The big move by Heron Therapeutics
since the end of May generated a ton of reader email and tweets for this week's Biotech Stock Mailbag. Most of the comments I've received are skeptical, questioning Heron's suddenly upsized market value&nbsp;relative to the future commercial potential of its lead drug Sustol, which aims to reduce nausea and vomiting in cancer patients undergoing chemotherapy.
If you haven't been following the Heron story, here's what the stock chart looks like since the beginning of May.
The spark was a Heron press release on May 28 announcing results from a phase III study demonstrating that a Sustol-containing regimen was superior to the current standard of care in the &quot;prevention of delayed-onset chemotherapy-induced nausea and vomiting following administration of highly emetogenic chemotherapy agents.&quot;
Simply explained, Sustol, administered as an injection, stops cancer patients from throwing up for one to five days after they've been treated with chemotherapy drugs known to cause a lot of nausea and vomiting.
Heron intends to seek U.S. approval for Sustol later this summer. If approved, the drug will be on the market in the middle of 2016. Doctors have a lot of treatment options currently for chemotherapy-induced nausea and vomiting (CINV), both branded drugs and cheaper generics. Heron points out that Sustol has the potential to be the first injectable CINV drug in its class to be approved specifically for the prevention of delayed-onset CINV in patients undergoing highly emetogenic chemotherapy.
@adamfeuerstein Sir Adam, do you have an opinion on the $HRTX data? market seems to think its wonderful, but it looks extremely questionable — RormixCaribbean (@RormixCaribbean)
June 3, 2015
According to Heron, the phase III &quot;MAGIC&quot; study achieved its primary endpoint, with 65% of patients responding to the Sustol regimen compared to 57% of patients treated with a Zofran-containing regimen, the current standard of care. These are the data upon which Heron intends to seek U.S. approval for Sustol.
If these data hold up, Sustol is most likely approved. Heron hasn't yet presented the full results from the MAGIC study, so caution is warranted. Notably, the 57% response rate in the Zofran control arm seems a bit low relative to 65-70% response rates seen in previously conducted and published studies. This might not hurt Heron's chances of securing Sustol's approval, but it could hurt commercially if doctors don't view the new regimen to be superior in actual clinical practice.
Heron said more data from the MAGIC study will be disclosed and presented at a later date. It will be important to see how Sustol performed against acute (one day) onset nausea and vomiting.
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@adamfeuerstein Biotech mailbag question. $hrtx after a double in a few days, is this company worth double? Haven't we seen this story b4? — Britney Spiers (@Britney_Spiers)
June 4, 2015
At $32, Heron's market value is approximately $1.7 billion, including stock options and warrants.
Broadly speaking, the CINV drug market is divided into four buckets of patients encompassing two types of chemotherapy (moderately and highly emetogenic) and two stages of CINV prevention (acute and delayed.)
Heron will not provide specific guidance on potential Sustol sales, but the company believes it can take meaningful market share and sales from Aloxi, the most-prescribed CINV drug currently on the market in three of the four CINV patient buckets. Sustol has the potential to be approved for all four CINV patient buckets.
For the fiscal year ended on March 31, Eisai reported Aloxi sales of approximately $400 million (converted from yen.) Aloxi patents begin to expire this year, which means cheaper, generic versions of the drug are coming soon.
I don't have a consensus estimate for Sustol sales, but two analysts covering Heron forecast peak 2020 sales in the $400-500 million range. Heron points to outside market analysis saying total CINV drug sales will grow to $1 billion in 2020. Put these disparate pieces of information together suggests Sustol captures half of the CINV market in 2020 even with competition from other branded drugs and generics.
I'll let you come up with a probability that Heron hits these Sustol sales forecasts. Heron's current market cap seems to bake in a lot, if not all, of Sustol's commercial potential.
Also keep in mind that Heron has a second CINV drug, HTX-019, in clinical development. The company says HTX-019 could be submitted for approval in the second half of 2016. Heron is also working on a post-surgical pain drug, HTX-011, which is likened to Pacira Pharmaceuticals'
commercially successful Exparel. I spoke with one significant investor in Heron who believes HTX-011 is the company's &quot;sleeper hit&quot; pipeline product.
Scott B. writes:
I'm disappointed that you haven't chimed in on Heron and its dismal track record. This is a company which has failed repeatedly, changed its name yet the price keeps going higher. I suspect the hedge funds who own the company are playing with it for profit and I want you to explain how this is happening. Why haven't you written about it yet?
There's a lot to unpack in Scott's email. He's right about Heron's less-than-stellar track record. Heron used to be known as A.P. Pharma. Sustol went by the moniker APF530. The FDA rejected the drug twice previously, the last time in 2013. At that time, A.P. Pharma blamed the FDA rejection on unresolved manufacturing problems.
Soon after the second rejection in 2013, A.P. Pharma's chairman and largest shareholder, the hedge fund manager Kevin Tang, cleaned house. The management team was replaced and the company's name changed. Tang brought in Barry Quart to run Heron. Quart and Tang go back to the days of Ardea Biosciences, which Tang controlled and Quart ran before it was sold to AstraZeneca
for $1.3 billion.
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Heron has taken longer than expected to get to the point where Sustol can be resubmitted to the FDA for a third time, but Quart has done a good job running the company, investors tell me.
Make no mistake, however, Tang pulls the strings at Heron. He remains the chairman and largest shareholder. After the Sustol MAGIC trial results were announced, Tang bought more Heron stock in multiple purchases, which no doubt contributed to the big rise in the share price. After Tang's stock purchases, Heron went out with a stock offering of its own to raise additional money. The deal was priced at 24.75 per share. Heron is now above $32. I asked Tang to speak about Heron but he didn't respond.
Phillip T. emails:
You're unfairly critical of
Aerie Pharmaceuticals
. The changes made to the Rhopressa study make positive results more likely. Investors recognize now that the stock was undervalued, so it's returning to a more normal state of valuation.
Rewinding a bit. Earlier this week, Aerie&nbsp;issued a press release announcing &quot;positive feedback from the FDA&quot; on proposed changes to the primary endpoint of a nearly completed phase III study of its troubled glaucoma drug Rhopressa. The day after Aerie's announcement, the stock jumped more than 50%.
I expressed these thoughts on Twitter:
$AERI should publicly disclose the actual FDA letter about changes to the Rhopressa study endpoints. &quot;Positive feedback&quot;? Prove it. — Adam Feuerstein (@adamfeuerstein)
June 16, 2015
&nbsp;
$AERI glaucoma drug sucks. Fails ph3. Instead of developing better drug, company dumbs down next clinical trial. Stock + 54%. — Adam Feuerstein (@adamfeuerstein)
June 16, 2015
Aerie's announcement came on the heels of an analysis conducted by the FDA, published in the British Medical Journal, which found that drug companies routinely fail to fully inform the public about their communications with the FDA. The study focused on complete response letters -- the confidential notices FDA sends to companies when a drug has been rejected. In the analysis, FDA found that companies often omit important reasons for a drug's rejection when informing the public, including investors. Some of the publicly disseminated explanations companies offer for why FDA rejected a drug are misleading, some are lies, the FDA analysis found.
Aerie's first phase III study of Rhopressa ended in failure. The drug was unable to demonstrate statistical equivalence to an older glaucoma drug. Aerie's response to the Rhopressa setback was typical: Data-mine the negative results to find a subset of patients where the failed drug might work better. Aerie now claims that the first Rhopressa study would have succeeded if patients with more severe glaucoma (as measured by baseline intraocular pressure) were excluded.
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Aerie says it went to FDA and asked to change the endpoint of the second phase III study to exclude these more severe patients. Aerie says it received &quot;written and verbal communications&quot; from FDA agreeing to this significant study change.
Obviously, this agreement with FDA is hugely important to Aerie and the future of Rhopressa, so with the above-mentioned FDA study in mind, I asked the the company to publicly disclose the letter it received from regulators. Aerie ignored my request.
I'm not accusing Aerie of lying about the &quot;positive feedback from the FDA,&quot; but investors deserve more transparency from drug companies about communications with regulators. By law, FDA is not allowed to make public its communications with drug companies. Unless the law is changed, it's up to the companies to be more transparent voluntarily, There should be nothing to hide, so why not disclose these FDA letters in full?
Aerie wasn't the only drug company offering one-sided versions of FDA communications this week. Cormedix
also issued a press release about &quot;positive feedback&quot; from FDA, but the company went one step further.
&quot;Cormedix is thankful for the valuable feedback provided by the FDA, and we are encouraged by their continued enthusiasm and support of Neutrolin,&quot; said Cormedix CEO Randy Milby, quoted in the company's press release.
Any proof of FDA's enthusiasm and support, Cormedix? None offered, and I did ask.
@adamfeuerstein doesn't $aavl brings whole sector (GT in particular) credibility in question?? — Big Chodu (@BigChodu)
June 16, 2015
&nbsp;
Every gene therapy company is different and should be viewed that way. The clinical setbacks&nbsp;at Avalanche Biotechnologies
and Celladon
don't mean Bluebird Bio
will fail, too. The converse is also true.
As an investors, it's easy to lump together all gene therapy companies, especially when there isn't much clinical data available to distinguish one therapy from another. [A raging biotech bull market where almost all stocks go up helps, too]. The same can be said for the crowded field of cancer immunotherapy companies.
But as we witnessed this past week with Avalanche&nbsp;and Bluebird, important differences in companies developing similar technologies do exist. The challenge for me (and you) is to figure out those differences to stick with the winners and avoid the losers.
&nbsp;
@adamfeuerstein Who is this 10b5-1 and is he/she on twitter?! I need to follow them because their trades are always money... — Ozgur Ogut (@Ogut_Ozgur)
June 15, 2015
No comment except to say I found this very true -- and funny.
Time for hate mail! Blake R. is a MannKind
fan. He only likes to read good news.
You are worse than the scum of the earth and before you came along it was Harry Reid. How much is Novo Nordisk paying you for your hit pieces? Better pocket money than helping millions of diabetics, right???? Remember, one day you will have to answer for your sins against all of mankind and for them you will rot in hell.
I like how he worked &quot;mankind&quot; into his otherwise nonsensical tirade against my MannKind coverage. Clever, Blake!
OceanPacific626 aka William is similarly displeased with my bearish view on MannKind. He writes:
Your article is libelous as it is intently misleading to the public and causes with intent harm to the company, the products and the stockholders. If you continue to write these without retraction I will personally sue you and TheStreet and make it very public on you as well since you like to be sending out misleading articles.... You are clearly inept and chow it.
Chow it?&nbsp;
DDK writes:
Bald, glasses and little wiener... so pathetic. Hope everyone sees the fullness of [bleep] you bash about MannKind.
Thanks for reading, DDK!
Oh no! Chow and several $MNKD investors considering a lawsuit against @adamfeuerstein Go Afrezza... pic.twitter.com/IDRYjE2D2r — Zatol (@ST_SquadCar)
June 9, 2015
&nbsp;
On that note, have a nice summer weekend.
Must Read: 10 Stocks Billionaire John Paulson Loves for 2015<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/HRTX.html?cm_ven=rss_ticker">HRTX</a>.
EquitiesBiotechDrugsHealth CareBLUEHRTXCLDNAERIAAVLMNKDThu, 18 Jun 2015 12:52 GMThttp://www.thestreet.com/story/13190733/1/receptos-analyst-defends-company-but-sounds-confused.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13190733/1/receptos-analyst-defends-company-but-sounds-confused.html?cm_ven=RSSFeed
Receptos Analyst Defends Company but Sounds Confused<p>BOSTON (TheStreet) -- I have some beefs with Leerink Partners biotech analyst Joe Schwartz and his research note published Wednesday night in which he attempted to rebut my story about Receptos
and why an insider stock sale makes an imminent takeout unlikely.
Must Read: 10 Stocks George Soros Is Buying
Schwartz writes:
Today during the afternoon hours of trading, RCPT shares came under pressure following a blog post highlighting the Form 4 filed by LLY Ventures Partner last evening (6/16) disclosing the sale of [approximately] 20% stake (equivalent of $40 million), which, in our opinion, could be indirectly viewed as mgmt's lack of willingness for a potential deal in the near future.
Blog post? No, Joe. It was an article written by a business journalist (me) with 25 years of professional experience, published by a well-known digital media company (TheStreet) founded almost 20 years ago. This particular journalist (me) has been writing about the biotech sector and biotech stocks for 14 years, longer than you've been a working sell-side analyst. So Joe, respect your elders and GET OFF MY LAWN!
&quot;In our opinion&quot;? No, that's my opinion. Sort of. I didn't say Receptos management lacks the will to sell the company in the near future. I wrote&nbsp;that Lilly Ventures is represented on Receptos' board of directors by Managing Partner Ed Torres. If Receptos was right now engaged in active sale negotiations, Torres, as a company director, would know about it. Therefore, the sale of Receptos stock by Lilly Ventures and/or Torres doesn't make any sense.
Maybe you agree with me, which is confusing since your note makes it sound like you don't.
Schwartz writes:
&quot;We do not share this opinion....&quot;
Oh, you disagree with me, but why did you say the exact opposite in the previous sentence?
Schwartz continues:
We do not share this opinion and continue to believe that mgmt is being prudent and patient in identifying the right strategic acquirer/partner who may be best suited to a) unlock near-term value of ozanimod across Central Nervous System (CNS) and Irritable Bowel Disease (IBD) therapeutic areas, and b) nurture an early-stage pipeline.
Okay, in other words, you believe a sale of Receptos is not imminent, which is what I said. You do agree with me.
Schwartz says more:
There should not be much fast money in the stock for M&amp;A, in our view, since management has been clear that they are in no rush to do a deal, given that the company has $645 million in cash and we believe the wherewithal to take the organization to the next level while they execute on ph. 3 program in multiple sclerosis and ulcerative colitis, as well as ph. 2 in Crohn's and 4606 in esophageal eosinophillia.
There's no fast money in Receptos speculating about a near-term takeout? Really?
Receptos' stock price rose 33% (intraday low to intraday high) in the past seven trading days. The move in the stock started with a June 9 unsourced rumor (published in an actual blog post) claiming Receptos was in active sales negotiations with multiple suitors.
Let's look at the chart:
There is no other reasonable explanation for this sudden rise in the value of Receptos' stock price. The company reported no news over the past seven days. The only &quot;news&quot; has been the persistent takeout speculation and analysts responding to same. Sorry, Joe, but there's a lot of fast money in Receptos speculating about a (fast) takeout.
Or, there was a lot of fast money in Receptos. Perhaps not so much now that I pointed out the Lilly Venture insider sale.
More Schwartz:
We believe downside for the stock should be limited because we have confidence that management (who has monetized less attractive assets in the past) will not enter into an unattractive partnership deal.
Receptos closed Wednesday at $177.48, still 20% higher than where the stock was priced when the takeout rumors started one week ago. It's up 4% in premarket trading Thursday. What downside are you referring to?
Schwartz's note continues but I'll stop here because he's clearly confused. Let me help.
I'm not bearish on Receptos. I like the company and its pipeline. Nothing I've written this year about Receptos could be interpreted as being bearish on the future of the company. I even agree with Joe that Receptos is a strong takeout candidate.
However, my Wednesday story&nbsp;was not about the company's long-term potential. It was about how an insider sale of Receptos stock -- by someone who would know if the company was about to sell itself -- contrasts with the unconfirmed speculation of an imminent Receptos takeout that sent the stock up more than 30% in one week.
@smhassan @adamfeuerstein what a joykill $RCPT — Anthony Felli (@344xavierfelli)
June 17, 2015
That might be true.
Must Read: 5 Small-Cap Stocks to Trade for Big Gains<P></P>
Click to view a price quote on <a href="http://www.thestreet.com/quote/RCPT.html?cm_ven=rss_ticker">RCPT</a>.
<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.BiotechDrugsHealth CareWed, 17 Jun 2015 15:58 GMThttp://www.thestreet.com/story/13189382/1/synergy-rises-on-positive-results-from-constipation-drug-study.html?cm_ven=RSSFeedtwocents@thestreet.com (Adam Feuerstein)http://www.thestreet.com/story/13189382/1/synergy-rises-on-positive-results-from-constipation-drug-study.html?cm_ven=RSSFeed
Synergy Rises on Positive Results from Constipation Drug Study<p>Updated from 8:12 a.m. with current stock price.
NEW YORK (TheStreet) -- Synergy Pharmaceuticals'
experimental drug plecanatide significantly reduced chronic constipation compared to a placebo, achieving the primary goal of a late-stage study, the company announced Wednesday.
Shares of Synergy are&nbsp;up 52% to $7.06 in midday trading on the positive plecanatide results, which also suggest the drug is better tolerated than Linzess, a competing chronic constipation drug already approved and marketed by Ironwood Pharmaceuticals
.
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Synergy is conducting a second phase III study of plecanatide, with results due early in the third quarter. If the second study is also positive, the company intends to seek U.S. approval for plecanatide in the fourth quarter.
In a study of 1,346 adults patients with chronic constipation, 21% and 19.5% of patients treated with one of two doses of plecanatide had a durable response compared to 10.2% of placebo patients. The differences in durable response rate favoring both plecanatide doses were statistically significant, the company said.
Durable response was defined as having three or more bowel movements per week plus an increase of one or more bowel movements from baseline in the same week for nine of the 12 treatment weeks. The same patient had to respond for at least three of the last four weeks of treatment in order to be counted as a durable response.
Plecanatide also showed a statistically significant improvement in stool consistency compared to placebo.
The rate of diarrhea, a key adverse event, was 5% to 6% in the plecanatide patients, compared to 1.3% in placebo patients. Notably, plecanatide's observed diarrhea rate is considerably lower than the 16% listed in the Linzess label approved by the FDA.
Plecanatide is a pill taken once per day. The drug works by mimicking the activity of a hormone which increases the flow of fluids through the gut.
Synergy&nbsp;has been the subject of takeover speculation, which will only intensify given the positive results from the plecanatide study announced Wednesday.&nbsp;
Must Read: Jim Cramer's Five Best Stock Picks for the Biotech Sector <P></P>
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<p/>Click to research the <a href="http://www.thestreet.com/markets/sectors-and-industries/health-care/drugs.html?cm_ven=rss_industry">Drugs</a> industry.BiotechDrugsHealth CareIRWD